It was for plausible deniability because of regulatory scrutiny. Regulator's dead now, so now there's no downside and only upsides to spying on your users.

They never did this for user privacy, and yes I think you're spot on. This was just to remove liability.

Now it just costs them the data and development cost to maintain. Any remaining problems they'll throw some crappy AI moderator at to fix.

Palantir