Well, technically this is still true. Files you are putting to iCloud by yourself voluntarily are not staying in your iPhone in the first hand. Everything which is against this, is only speculation currently.
If you don't trust that, that is another story. System is full black box.
Am I missing something more than "but it's happening on-device!"?
Your answer is "no".
It's not whether it happens on-device, off-device, in the cloud, in the tubes, or anywhere.
It's that Apple said that they would not do this, and now they're doing this. You can make technical quibbles that what they promised was slightly different to what they're doing, but they're irrelevant. The core promise of "what happens on your iPhone stays on your iPhone" is being broken. It's that breaking of the promise that people are angry about. Does that make sense?
Also, it's actually pretty easy to mess with Android and get it un-googled. Google don't make most Android phones, so there's less hardware-level enforcement of rules, and more independent alternatives. This is less so for Apple devices. If Apple decides to do something you don't like to your phone, you are SOL; you can only accept it or ditch Apple and switch to Android/something else.