The EU Commission is lying open on social media about chat control. Tomorrow EU governments debate about Chat control 2.0 Use the fightchatcontrol.eu email tool to make yourself heard
I'm going off of a article by TechRadar, but essentially: yes. This isn't about breaking encryption as I initially thought, though that seems to have been the goal when the same law was proposed (and rightfully rejected) in 2022. Rather, the new revision is about making encryption utterly pointless through the virtue of scanning all messages on your device, as you suggested. At least that's my read on the situation.