Ok, let's assume (for the sake of argument) that everything is on the up-and-up, and Microsoft will behave in a completely equitable and user-friendly way with regard to this feature going forward. Where does that leave us?
There is a spyware feature built into Windows 11. It is off by default, but a malware that wants to capture this kind of information doesn't have to install anything, and it doesn't have to run any background processes that might get caught by a system monitor or blocked by application whitelisting. All it has to do is turn this built-in feature on, and then exfiltrate the data later.
Setting this off by default doesn't remove the security issue.