That would be false testimony, not hearsay. Hearsay ("John Smith told me he heard MeinBlut kidnapped the Lindbergh baby") is not allowed. Witnesses lying about what they saw and or participated in is allowed, although it can be lies.

Sorry, and as for "what is abuse", these are looking for exploited children. There are a lot of questions here, the morality of mass surveillance, the risk factors due to hash collisions (intentional or otherwise), etc, the one thing I doubt is an issue is a fuzzy line on "is this abuse"