This is probably done to compete with Google Photos which has a great photo search by word feature.
With that said, Apple can use whatever privacy measures to protect user data. But at the end of the day, a subpoena can easily force them to hand over data.
The best privacy measure is to just not have the data. I guess indexing photos offline in phone is not very feasible yet.
Apple Photos is already capable of searching your photos by word/content fully offline on-device.
Google Photos is unable to search your photos by word/content fully offline on-device. Hell, it can't even search by file name if you don't sync your photos to the cloud!
I don't think Apple has to worry about Google at all.
There has been a form of on device indexing since at least iOS 12. My understanding is it performs a basic indexing typically overnight when the phone is charging and allows one to perform searches like "dog" or "car" and pull up matching images.
https://support.apple.com/guide/iphone/search-in-photos-iph3...
Hence why Apple started sending photo hashes to their servers for indexing by default.
There's only so much offline computing power.
It's right there in the help text:
> Allow this device to privately match places in your photos with a global index maintained by Apple so you can search by almost any landmark or point of interest.
They are saying that they match your photo against their global index.
They are not saying that they will add your photo to their global index.
Nobody said that except you.