Most moms and old folks aren't going to fuss or understand privacy and technical considerations, they just want to search for things like "greenhouse" and find that old photo of the greenhouse they setup in the backyard 13 years ago.
It's one thing if all of your photos are local and you run a model to process your entire collection locally, then you upload your own pre-tagged photos. Many people now only have their photos on their phones and the processing doesn't generally happen on the phone for battery reasons. You CAN use smaller object detection/tagging models on phones, but a cloud model will be much smarter at it.
They understand some of this is a touchy subject, which is why they have these privacy options and have limitations on how they'll process or use the data.
In a really sad way.
Then why they are doing it ? Maybe because CIA/NSA and advertisers pay good money.