The new AI features require internet, and they are running on their servers, so it should affect those as well. They have a “generative fill” “neural filters” which adds features to your image, so they definitely needs your full image to generate something.
In cracked photoshop these tools are not working, obviously. So i guess if you use these cloud tools than you send your images directly to adobe hq.
I have a cracked PS install, and the generative fill works just fine for me, and its got all inbound/outbound connections blocked on my firewall.
Are you thinking of “content-aware fill”? Generative fill is, as far as I’m aware, much, much newer and uses newer generative AI. Content-aware fill is basically clever automatic clone stamping.