> Doesn't it sound reasonable?

If you were hired with this as an explicit expectation, yes. It's one thing to know that your actions can be audited in case there's some sort of incident but imposing unlimited surveillance and using that information for the purpose of eliminating your job could be argued to be intimidation (ie. "we can't afford mass layoffs but aggressively monitoring employees will force the undesirables to quit").

No one likes the terms of their employment being changed against their will no matter how legal it might be. Why not make it opt-in in exchange for some other perks? If the data is valuable then compensate employees for the added burden/liability of total telemetry.

I’m not sure the terms of their employment changed; being subject to monitoring has been in practically every employment agreement written in the past few decades.

What did change is the culture and environment. While that term was always in the agreement, it was largely dormant, activated on an as-needed basis to troubleshoot issues, collect evidence for disciplinary actions or security investigations, etc. Now, it’s on 24x7.