"So, as a clear signal of our commitment to your privacy, we’ve deleted the entire collection of user uploaded contact information from our servers."
That sounds like exactly what you were hoping for.
That sounds like exactly what you were hoping for.
So, they haven't changed their implementation, they've just added the ability to opt out of the poor implementation.
They are putting a false choice in your hands that they hope will lead to the status quo while still giving a show of making good on this issue. They could, through sophisticated hashing and matching algorithms, do the user matching without ever learning your contact details. But they aren't bothering to do that. Instead they are just planting a checkbox in front of the user before they go and violate their privacy, and they hope that the vast majority of users will just check it and they'll only lose data from a minority of privacy nuts. Which means Path will end up exactly where they would have been anyway - with a giant database of personally sensitive information sitting unencrypted on their servers, waiting to be exploited, abused or leaked.