I agree with you, there could be scenarios where customers supply their own keys and compress the data on their own. My original statement is still true though,

I agree with you, there could be scenarios where customers supply their own keys and compress the data on their own. My original statement is still true though, the data at rest ends up being compressed and encrypted. That said, of course, customers can upload encrypted blobs of uncompressed data. But I’d call it an exception that proves the rule. Here service simplicity should win and those blobs may end up recompressed.