Given the kind of burn rate those people have at government agencies I would guess that they have some form of partnership with aforementioned agencies. I glanced through their FAQ and site but didn't see anything specifying that however.

Other than that I have no idea how you would even be able to have the images to classify in the first place without running into problems.

To build a classifier, yes, you are correct. But this isn’t a classifier to identify new content that has never been seen. This uses perceptual hashes to help organizations detect if known CSAM is being shared on their platform.

For an organization that uses this, wouldn't they need to have access to a source of constantly updated known CSAM? How is that going to work?