SDR content looking bad when HDR is enabled, especially just the desktop and basic OS, has been a thing for years on windows. Guessing you either didn’t actually have a real HDR monitor, or just didn’t realise it shouldn’t look like what it did.

Cloud-based use of AI doesn’t mean that they use your data for training or anything either - if you’d spent even 2 minutes looking at copilot in Windows you’d know this. On device or in cloud, you have privacy settings that control it.