I wouldn't be surprised at all, given that Photos knows the names and faces of all the loved ones in my life. Not just people, in fact, but the "furry friends." And Calendar and Reminders knows where I go. And so forth.
The feature is genuinely useful. Only thing is it should be opt-in and have guarantees about where/how the data is stored, such as encrypted-at-rest. I trust Apple with that more than all other Big Tech combined, but still in a "trust, but verify" way.