I don't think that is what will happen.
First off, I belive Recall is such a thoroughly bad idea, with such enormous risks and liabilities baked right into it, that it could only have come from ono person at the very top of Microsoft*. A person that nobody dares go against.
That CEO-like person gets this idea that: "Maybe if we have AI capture all of the data going through a PC and also all the users responsed to that data, we can create a robot that can at least simulate users well enough to perform their daily tasks. Great!".
Then they set about getting The Organisation to buy this Fantastic, World Beating, Idea.
This is when they will encounter two things that are working well at Microsoft. Their smart developers, their talented product managers, and their legal team all piles in and explains why this is likely to end badly, what the possible risks are, and what the consequences could be. The other thing they encounter, is the balkanisation. There is no way, ever, that any department will build a working API that allows "The Competition" to leverage "Their Product" for their nefarious workings. If one makes them do it, they will totally half-ass it, and we get stuff like Microsoft Projectflow. This affects everyone at once so the CEO with the Bright Idea cannot on-board anyone to commit to this.
The CEO-like Solution becomes: "Fuck all of you guys! I'll have my very own team dump the screen buffer into a database and have the AI figure out stuff from the picures!!!. That's easy enough!"
Now, The "Microsoft Viva Experience"-team are probably the slime comitted to this idea: For them, it is just another sales feature to be able to better track the employees activities and to get more KPI's for the managers, also some illegal ones like sexual orientation, one suspects.
So, it will be sold as "Helping with automation". In reality it is Surveillance for Everyone.
*) Or a subversive consultant group, intent on destroying capitalism, that deliberaty only provides bad ideas and sell them to CEO's.