In cloud storage they can manually review the picture on server side for false positives before throwing to law enforcement.

You are consenting to the upload and are aware that it can be searched so not a legal problem.

Law enforcement will also review the picture in the cloud instead of busting your door to search your phone and the whole scenario from article.

When they do it client side they can't just upload your content on hash collision. (or maybe they do which is also a problem in itself)