I am also also deeply concerned about my use of iTerm now.
I access HPC environments where I may have access for a short period of time. I am expected to take responsibility to clear out my data after use and don't expect there to be any data leakage. If I had been manipulating PII research data in the past year and using iTerm's SSH integration I would be in a bit of a bind and have to send some really embarrassing emails asking sysadmins to see if these logs exist, and if they belong to me, followed by disclosing data had been leaked.
I use some of the more advanced features but at this point wonder if I should be using any features beyond the basic, and then I may as well be using another terminal. I haven't found a cross-platform editor that feels as native on MacOS as iTerm, ghostty included.