What you have heard about is a feature called "Recall", which is something that has not actually rolled out and will only be coming to PCs with specific neural processing units. Other windows users will not be affected (although of course that will change over time as old devices are replaced with new).

Is it possible? Yes, of course it's possible. You could say that about pretty much any operating system - including Linux distros - if the functionality turns out to be popular.

However, to be 100% clear, this is functionality that the user can disable (either entirely, or on an app-by-app basis). And data is never transacted to the cloud or with Microsoft. What's on the device does not leave the device. It's also really not in Microsoft's own interest at all to try taking on that responsibility... How would they know if you paid for an app/game/song or not, even if they wanted to?

But back to your question: yes, of course it is possible. This type of technology has already been prototyped in different ways (e.g. Apple have done work about identifying CSAM on the iPhone, although not implemented).

Yes, Linux gives you a lot more control. If you were to make the switch, I would list a hundred other reasons that are far more compelling than this storm in a teacup.

That said, there's absolutely no reason a Linux distro couldn't also bring the same functionality, if there is consumer appetite for it.

If you are looking to truly make it "impossible", you need to air-gap your machine and not connect to the internet anymore.