Seems like it's only screenshots and only if you have push notifications with images enabled (text-only is an option), which is a technical necessity (push notifications require going through a server) but one they didn't really explain in the app when it looked like all your options were local-only. Unfortunate, and I realize we're only gettng Anker's side of things in their explanation (e.g., that they are only being used for this purpose, encrypted, and stored for as long as they say), but I don't think it's really quite as bad as some headlines suggest.
But I guess no one would read if the headlines didn't sound a little scandalous. (Why they wrote that headline instead of accurately titling it like your post. Haha.)
But wait, There's more....
Anyone is more than welcome to watch videos of late night cat visits from my cameras.