Wait if this is really true, why are people freaking out? Wasn't Apple already scanning photos uploaded to iCloud? And now it just happens on-device?
The system only works with iCloud Photo Library, it needs a server side component to continue the process.
https://www.apple.com/child-safety/pdf/CSAM_Detection_Techni...
This is a very interesting read and personally I think they’ve gone to extreme length to make this system as private as it could be.