I just spent 10 seconds trying it. It was able to interpret my intentions and parse out commands from the literal transcription. "bazinga but in all caps and with a j" became "BAZINJA". So at the minimum, it's going through an LLM in the league of llama, which if run locally in browser is slow as molasses on my ancient MacBook. So it's definitely going to the cloud. As a rule of thumb, you should just assume any website you didn't completely code yourself is sending every mouse movement and every text that you type and then backspace, including passwords, to a cloud big data analytics repo via a few javascript listeners.
