this post was submitted on 28 Jun 2023
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No, they're encrypted. But Apple stores a copy of your key because most people forget their Apple password at some point (usually after they've wiped their phone and are setting up a new one) and need Apple to reset their password/re-enable their encryption key on the new device.
Huh the more you know...
Also know that if you still want iCloud backups but want everything stored encrypted you can enable “Advanced data protection” which means that Apple doesn’t store the encryption key, you do need to setup a recovery method such as a recovery key or recovery contact however if you lose your device and recovery method your data is forever lost and Apple can’t help you like it can in standard data protection mode.
Also note certain sensitive categories such a health and passwords are always encrypted as it’s determined it’s worse for someone else to get access to that data then it is for the user to lose it meanwhile generally a user losing their photos and messages if they forget their password is worse then if a hacker resets the password and gets access.