The feature is because it’s illegal for Apple to host/have/posses CSAM (in iCloud). But Apple doesn’t want to know what they host for you on iCloud. So they n

The feature is because it’s illegal for Apple to host/have/posses CSAM (in iCloud). But Apple doesn’t want to know what they host for you on iCloud. So they need to be sure that before something is uploaded to iCloud, it’s not CSAM. So if you don’t intend to upload to iCloud (i.e. you disable iCloud on your phone), then Apple doesn’t care anymore if you have CSAM or not.