Microsoft hasn't been scanning files on local machines but Microsoft has been doing essentially the same thing Apple has been for years -- they pioneered it with PhotoDNA back in 2009. It's been in use with OneDrive since back when it was called SkyDrive (https://www.makeuseof.com/tag/unfortunate-truths-about-child...). Apple's implementation is scanning images 1) stored on iCloud or 2) in Messages if parents turn it on.

The first seems pretty arbitrary -- why is it worse to scan files you're sharing with the cloud locally than in the cloud (except potential performance/battery impact, but that seems moot).

If Apple brings this feature to the desktop, it seems likely they'd be using it the same way: files stored in their cloud.

Ok but this is not Windows, Which the op stated