According to available information that I've come across, everything is processed on-device and encrypted and 25gb can store months of rewind data depending on how much and how you use your device. At that rate, a terabyte should store about a decade of history (I can't think of anything you would need to go that far back for though).

If security researchers don't find sussy behavior where Recall sends back some sort of data beyond basic telemetry, there's not really any higher of a privacy risk compared to using your computer as you currently do. Also you can disable it for certain applications and delete history when you want to (or disable the feature altogether). People are being really weird about this for reasons that have already been addressed.