depends on your semantics of "scanning".
A hash-function is applied to the picture on-device (that is an information destroying function, so I wouldn't call that a scan). In case of a match, the picture is flagged with this "safety voucher" - which probably has the necessary encryption keys, that an Apple dedicated team might inspect those photos, once the threshold has been exceeded.
So privacy is reduced only in those cases and for those pictures, where a match was found.
The probability that that happens in case of a non-CSAM picture is related to the "coarseness" of the hash-algorithm,
by using a finer hash function Apple could further reduce this risk.
If the mechanism works as designed in my view the benefits outweigh the risk of the privacy intrusion.
However Apple should first prove it can make the mechanism tamper-proof before even thinking of opening it up to third parties.