As far as I can tell in 2 party states, it depends on the expectation of privacy, and even in public, your intent. In any case, here is their threading of the needle:
https://support.apple.com/en-us/148354#:~:text=app%2E-,How,s...
https://support.apple.com/en-us/148354#:~:text=app%2E-,How,s...
What a pain in the ass. This sort of arbitrary (and no doubt janky) kneecapping/censorship makes these things fundamentally unfit for purpose. A transcription that doesn’t transcribe what was said if it thinks it’s naughty is worse than useless.