The use of physical one-way hash functions is involved.
Apple loudly and publicly claim these facts (about data not leaving your device, and sync being end-to-end encrypted). It is one of the most scrutinised companies (see every -gate and even Google's 0-day blog), and they made Privacy their key differentiator.
They have everything to lose and almost nothing to gain from secretly tracking personal data.
This feels more like a marketing campaign to associate Apple with privacy. From 2020 they have been mentioning it insistently, and while Apple has made steps towards it, they still make devices that deliberately include tracking functions, even if they make third parties disclose them.
If Apple was really serious about being a bastion for user privacy, they would make drastically different OSs and APIs.
(Of course I have no proof, that’s why it’s called paranoia)
It's a proprietary device, running proprietary (updateable) firmware, using proprietary tamper-resistant security chips for which the supply line and schematics are not publicly verified.
If my life depended on it...I'd crush my phone, laptop and every other wifi enabled device into dust immediately.