It's the difference between a neighbor, and a neighbor who is also an informant.
Plus you're contrasting the invasion of personal space, with the perception that a non-privacy space is now non-privacy.
But since the space was never private to being with has anything changed or has the airline just ruined your own fiction about the space?
It's not public in the fact that you cannot just legally waltz into somebody else's airplane without permission. You pay a company to manage the experience in the airplane within their powers. It is perfectly fine for consumers to question why a hitherto unspoken contract about cameras directly observing a passenger's seat has been broken, and the camera placed there entirely as a result of the plane's owners.
Now getting into ML. What are those cheap cameras we buy in Amazon going to be capable of in 10 years - auto-recording/notification options for: nose-picking, peeing, nipple flash/down-blouse/upskirt, screaming... IDENTIFYING people by name?
Beyond this, what about public places that are gender specific- bathrooms. Heck, we may even see bathroom stall camera's that aren't "watched" by anyone but ML - just for theft monitoring. If that happens we'll likely find out, yet again, that someone with eyes was watching after all.
I get that each generation doesn't really understand how it was in the past, and just pops up into whatever privacy shit we're doing today, but we just keep letting it slide.
My point is, the needle is moving with these small changes.
You already have a number of replies covering some good ground, but there is a word covering the feeling I don't see yet: stalking. There is a fundamental difference in feeling (and a legally recognized one as well) between being seen/heard a specific coincidental instances by a crowd of random strangers whom one might quite reasonably expect to never encounter again in their entire lives -versus- having a single person individual or organization conduct persistent surveillance of you. This isn't some weird obscure situation either is it? The uncomfortableness level seems to be pretty universal. The other unrelated passengers on the airplane are generally going to be an entirely random and diverse group of total strangers. They're unlikely to remember you, to care, or to have any particular interest in you, let alone the ability and volume of information necessary to affect you.
But the airliner is a singular entity, and in this instance it's actually fairly illuminating to apply the "personhood" idea to it and consider it as if a single powerful person was following you and recording you constantly. That person does have a direct economic interest in you, may wield a certain level of monopoly power depending on location, or alternately can easily potentially collaborate with a small number of other "persons" with your information. The person will not forget and can follow you over decades. They can do the same to friends, relatives and acquaintances, drawing inferences and information from higher level social network graphs that would not be discernible from a small given slice.
Now you might not care about this yourself, but you should still be able to recognize that it's something quite different then merely "being in public amongst instantiated strangers". Historically it has been perfectly reasonable from an information theory point of view to have a certain expectation of common likely "anonymity in a crowd", because it's not physically possible for a single human to remember tens of thousands of people. Historically when attempts have been made to use some minimal level of technology and large numbers of bodies to implement mass surveillance and centralized recording an analysis it has made people quite uncomfortable (the Stasi say). There is no reason why advancing technology making it cheaper and requiring less bodies would make people suddenly be fine with it would it?
Scale sometimes brings emergent effects that are a pure function of large numbers. You can't always do a clean extrapolation.
You're in public on an aircraft, you have no reasonable expectation of privacy. The people around you, including the airline's staff, can listen to your conversations/see you.
I'm not even arguing legally, even just in terms of common sense, everything you do or say is isn't private in those circumstances. So a camera being there (regardless of if it is used) isn't moving the needle either direction.