> "what happens on your iPhone stays on your iPhone"
Well, technically this is still true.
Files you are putting to iCloud by yourself voluntarily are not staying in your iPhone in the first hand.
Everything which is against this, is only speculation currently.
Except that this is all about analysing files that are not on iCloud, but on the device. So what is on your phone is now being reported to people who might decide to trash your life. Hardly "staying on your iPhone".