I think you have misunderstood the system.

The second scan applies only for those images which are flagged as positive, which are then accessible by Apple. This is applied to detect adversarial hashes. The rest of the images stays encrypted. So, indeed on-device scanning is the only way to enable at least partial E2EE with CSAM detection.

Yes, this was PR failure Apple. They rushed the announcement because of the leaks, and secondly they thought that people will understant the system when they did not. There is too much misundersting. That scanning for example is built-in so deep into the iCloud pipeline, that one does not simply change the policy for scanning the whole phone.