Worst case, they're saving it to an encrypted blob storage, calling that encrypted, and hiding deep in the ToS that you actually agreed to that

And then it's discovered that bucket was accidentally set to public for over 8 months. Oopsie daisy! But you can't sue us because also deep in the ToS was a forced arbitration clause.

Also, if you don't agree to the whole ToS, you can't use the computer you just paid for.