Well given that it happens client-side, the software that does the actual hash has to be loaded onto the phone, right? So the algorithm itself can be retrieved with some reverse engineering, and I doubt nefarious actors would have much trouble getting hold of CSAM images that are likely to be in the database. Which means that it's certainly possible to game the system. That said, it would probably take a state-level actor to actually do it, but that doesn't mean it couldn't happen. You're right that it wouldn't amount to much of anything, though, so I doubt anyone would bother.

Anyway, your point about privacy in the cloud is quite salient, I think. Personally I don't have an Apple phone, nor do I use cloud storage services, and I sure as hell don't have any CSAM, so I'm not really concerned about it. In fact, I was originally making a point similar to yours, and had to backtrack somewhat when I actually looked into how it all works.