How is Palantir a loophole?

I see this theory a lot (sometimes to justify their valuation, sometimes as a moral judgement, sometimes as an alarmist concern) but I genuinely don't see how this line of thought works in any of these dimensions. My understanding is that they're consultants building overpriced data processing products. As far as I know there isn't even usually a separate legal entity or some kind of corporate shenanigan at play; my understanding is that they send engineers to the customer to build a product that the customer owns and operates under the customer's identity as the customer. I certainly see how businesses like Flock are a "loophole;" they collect data which is unrestricted due to its "public" nature and provide a giant trove of tools to process it which are controlled only by what amounts to their own internal goodwill. But this isn't my understanding of how Palantir works; as far as I know they never take ownership of the data so it isn't "laundered" from its original form, and is still subject to whatever (possibly inadequate) controls or restrictions were already present on this data.