Regardless of their current brand, Apple is the next big advertising giant and no amount of brand purity is going to change this. The data of Apple's users is simply of too high value for Apple to ignore forever.
Makes me think of that first decade (98-08) when Google actually wasn't being evil. Yeah, it's inevitable that Apple will turn to this when they can't grow any more simply by raising the prices of their devices. Perhaps they have reached that point about now with iPhone 14.
I’m not suggesting apple is doing nefarious, it was simply an example of a large dataset. I assume they’re encrypting/scrubbing all your PII as that’s their whole motto.
But unless they’re doing some voodoo magic then yes the data is leaving is your device in some form. Hence why I can view every heartbeat (aggregated by the minute) since I put on the original Apple Watch in 2015 despite changing all my devices and only restoring from iCloud. Indeed I expect it’s just part of your iCloud data storage.
Actually I just launched the health app now and I can see the app explicitly asks if you want to allow sharing your data with apple, so if you say ‘yes’ then you’re not only storing but allowing apple to query your data (minus PII).
It's also off-brand for Apple to join PRISM and comply with thousands of annual requests for supposedly-inaccessible iCloud data. Neither of you will ever be proven right until we look inside those servers though, so making any conclusive statements is a mistake. Apple designed Schrodinger's datacenter.
Apple does have a separate opt-in “Research” program to facilitate this kind of thing.