If you think Apple is going to install something onto your phone to scan everything for wrongthink and send it to the CCP, you shouldn’t be installing their updates or using an iPhone anyway. They can already do that at any time. This feature doesn’t make it any easier. On the contrary, this feature seems specialized for its purpose, and to slide down your slippery slope they would need some different and more general kind of spyware.
I think my "slippery slope" concerns are less technical and more overton window shifting. If you have this practice of scanning images in place, it's not as huge as a leap to suggest we should register hate propaganda images (for instance, infographics) and not allow Apple to lawfully host it on its servers and so on. You just get less and less steps away from justifying banning things like propaganda against the government or individuals in the government and such.
I would agree on a purely technical level your phone is already pwned by Apple so worrying about this on a technical level is closing the barn door after the horse got out. However from a social perspective one of the holdouts against photo scanning has stopped being a holdout, and doing things from client-side makes it seem less wrong to do other things client-side.
Besides the privacy stuff, this also is a bit more of a slide towards software that you purchase being ultimately controlled by and for the benefit of parties other than yourself.
