Whether this is good or bad is a topic for fair debate, I think, but it continues to astound me both how little people are aware of this and that, in comparison, Apple's relatively privacy-preserving approach generated so much flak.
And you still need to scan local photos on the phone?
The only thing this adds to the threat model is mistrust for false positives in scanning engine - but in even the worst case scenario here (forged false positives), you're still ahead of the Google model, where the same forged false positives would be extremely likely to result in a full account review rather than review of specific images. Everything about "the device looking at your photos" is tinfoil hat, because the device is already looking at your photos, they're decrypted in RAM! All of the threat scenarios about "Apple adds a secret government backdoor that downloads your photos and sends them to the FBI" are already equally possible today!