It's not odd. The concern is that EU regulators would make it less private. By design Apple doesn't have access to your data used with Apple Intelligence, nor

It's not odd. The concern is that EU regulators would make it less private. By design Apple doesn't have access to your data used with Apple Intelligence, nor does anybody else. If EU regulators decide those features need to be interoperable and offered on a fully level playing field, that puts Apple in the position of having to provide third parties with access to data that they as platform owner have made a concerted effort to not have access to.