If payloads to LLMs are being passed around to various nodes, even trusted ones (like friends and family), it gets awkward if you send something very personal. Think sending a medical question to medgemma:27b.
Indeed, it's in-transit-encrypted so snoopers won't be able to see it, but it's not E2E encrypted nor in-process encrypted, the one's doing the inference could obviously see the input/output.