No, you're not misunderstanding. I guess I made that statement with the implicit trust of AWS so I didn't think to qualify it.
You're absolutely right that if AWS is a bad actor it has access to all the information, but I'm working on the assumption that it's more profitable to AWS to be a good actor than bad.
You're absolutely right that if AWS is a bad actor it has access to all the information, but I'm working on the assumption that it's more profitable to AWS to be a good actor than bad.