Apple can decrypt the data (no one knows the actual algorithm they are using to encrypt the data), or at least analyse data in such a way that they still can generate information out of it without knowing what’s actually inside. It’s based on an assumption that same data being encrypted using the same algorithm should generate the same output consistently.So how intrusive is the tracking if the data is encrypted?
For example, if your usage data has large quantity of visits to luxury brands (safari history or whatever), Apple would know based on known data and encryption output, without actually peeking into what you are doing otherwise. The more data you generate the more accurate Apple knows about you, without knowing exactly what you are doing.