> I would gladly take this if it removes a barrier to making iCloud E2E encrypted; they are likely bound to do this type of detection, but doing it client-side before syncing feels like a sane way to do it.

But there is an issue there. Now there is a process on your phone capable of processing unencrypted data on your phone and communicating with the outside world. That is spyware which will almost certainly be abused in some way.