In this case, if Recall records the screen constantly then it can get the DRMed video from Netflix, and therefore possibly exfiltrate it to the user for piracy easier? I think they nominally try to prevent you streaming it / recording it to shut that down.
The expectation is that Microsoft is exfiltrating this data because they want to use it for AI training, ad targeting etc. That doesn't require the user to have access to it, they'd just need some new rationale for exfiltrating it. Insert malware scanning excuse etc.
Also, the issue is that somebody is going to copy a ~30 fps video using screenshots without audio taken at an interval of ~0.2 fps? Nobody is going to do it that way.