The erroneous claim was that Apple handles image recognition and image search on servers, the way Google does.
Apple handles those tasks on the users own device(s) for privacy reasons.
I don't think anyone made that claim in this thread.
They do handle image recognition (at least some aspects of it) on their servers, unless you specifically went and disabled the right setting: https://news.ycombinator.com/item?id=42533685
You don't need any encryption to process locally.