I just read up on Recall from the Microsoft website. First of all, Recall is only available on Copilot+ PCs which specifically have a NPU chip specifically for processing AI locally. It takes periodic screenshots, and will use up to 15% of harddrive space (based on user preference). The screenshots are saved locally, single user, and BitLocker encrypted. The sole purpose is to have an AI be able to search this information visually and textually. At this point it is an optional feature.
I can see how this could be a useful feature in some cases. But I'm not sure I understand the reasoning behind storing screenshots vs some other form of local history. Or how much more affective this would be than just searching history or looking at Task View. It's hard to say how useful it is without having used it.
As for instances mentioned about what happens if your system is compromised, you can exclude apps and websites from getting screenshot, and it doesn't screenshot private browsing. However I don't really see a majority of users taking those precautions. I also don't really think for most people having screenshots makes the fact that someone has unwanted access to your computer much worse.