This means that the cloud model, where code is downloaded through a web browser, is right out. Regardless of where the keys are.
Currently, in the USA, the most generally accepted view among legal scholars is that this is not legal for the government to do -- mainly because of a view that it's a particular form of compelled speech / forced labor which is unconstitutional for the government to compel.
It is, however, an avenue that the law enforcement community does occasionally investigate as a possible route to get what they want. There's no clear court ruling as no cases have gone that far.
All the encryption/decryption happens locally (inside your browser/client).
Thats why, if you want to full text search in proton you have to download your complete history into your browser.
You either build your model to be resistant to a data request (user controlled keys that never leave the device), or you don't even come to the table.