Per Apple [0]
>Shared with You works across the system to find the (...) photos, and more that are shared in Messages conversations, and conveniently surfaces them in apps like Photos (...) making it easy to quickly access the information in context.
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>Yes, that's what I said. Enabling iCloud photos uploads your photo library to the cloud, so it's scanning your cloud photos.
Being disingenuous about it is still a thing though. You stated
> More accurately put, their intent is to scan cloud photos (...) (like every other cloud provider, including Google)
which makes it appear that the photos are only scanned server side "like every other cloud provider". Client side scanning is something that no other provider does, in contrast to what you stated.
[0]: https://www.apple.com/newsroom/2021/06/ios-15-brings-powerfu....