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Am I missing something more than "but it's happening on-device!"?
Your answer is "no".
Google's response here only makes sense if Google said "Did you mean: When did Neil Armstrong land on the moon?"
The whole premise is that Google and Facebook and everyone else are just doing this on the unencrypted photos you upload, in their cloud, with their own (presumably, but correct me if I'm wrong) undocumented algorithms and datasets.
Now here comes Apple, documenting almost everything except the dataset itself, and everyone is freaking out because it's happening on your own device. But then it's encrypting the whole thing and uploading it to Apple where they presumably do no additional scanning.
What is the actual difference if it's being looked for on-device vs. by the provider? Supposedly in preparation for a bigger push of encryption of the photos themselves, if they are not already encrypted in the cloud.
Am I missing something more than "but it's happening on-device!"?