The feature provides the ability to search through all of the previous things you've done and gain context in an instant, in a way that can be queried with natural language. I think we can agree what it aims to achieve is beneficial.
The implementation is what you're debating. I see these are two separate things, but they play hand in hand. If you get the implementation wrong, it can easily tank the feature.
Still, the documentation for this seems to disagree with what you're saying.
> This is a spyware that stores screenshots unencrypted
This page[1] states "Snapshots are encrypted by Device Encryption or BitLocker". They suggest that things aren't shared with Microsoft, though I totally understand the skepticism there.
[1] https://support.microsoft.com/en-us/windows/privacy-and-cont...