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Not sure if this is official or publicly announced, I didn't hear about it. That thing doesn't work when offline? So Adobe is collecting data. What, how much, anybody care to explain? It literally grays out when you turn off the wifi... Comes back to be 'available' when connection is back on.
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AI needs access to image banks for generating content. It can't be done on your machine. So it's processed on Adobe's servers using Adobe Stock and returned.
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I just wanted to erase few things from the image. I see your point
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Try the remove tool or content aware fill. Both are processed locally and very effective for smaller areas.