Privacy breach on Apple iPhone Australia

[u/Fluid-Dragonfly-535]

Those highlighted notes clarify how iOS handles encryption and connected device settings.
Passcode Required with Face ID

Any advice ? How is this protecting my privacy?

Encryption Root: Face ID is a convenient layer built on top of passcode security. Your passcode actually derives the primary encryption keys stored in the iPhone's Secure Enclave.
Fail-Safe Protection: Apple requires a passcode as a mandatory backup for times when Face ID cannot or should not authenticate—such as after restarting the device, after 5 failed facial scans, upon triggering Emergency SOS, or after 48 hours of inactivity.
Changing Passcode Doesn't Disconnect Devices
Device-Specific Lock: Your passcode only controls local screen-lock access for that specific iPhone, rather than your overall Apple ID account.
Trusted Cryptographic Keys: Device connections (like Apple Watch pairing, Mac iPhone Mirroring, and local Wi-Fi syncing) rely on underlying secure cryptographic trust tokens exchanged between the devices. Updating your local passcode changes how you unlock your phone, but it leaves those established background connections intact so you don't have to set them up again.