This has been in Android for a while now. I don’t know why you’d disable it unless it’s draining your battery; the whole point is to do all of the data processing on-device. If Google wants to listen in, they don’t need the AI coprocessor app to do it, they can just have Play Services do it directly.
As for privacy: just because an app doesn’t have internet permissions, doesn’t mean it can’t exfiltrate data. For example, Google documents that the service collects a device ID and analytics, probably transmitted through Play Services.
You can (should) disable analytics collection, of course. Sounds like a better deal to me.