All they have to do is update the system so captures aren't automatically uploaded to the cloud by default. It should be a setting you have to personally turn on, and should come with warnings about the potential of getting your account banned for saving certain types of content.
The button has been functioning this way for almost a decade. It’s the entire reason the controller has a dedicated button to share content. You don’t have to go to a menu or take any extra steps. You hit “share” and your content is shared.
To change that default to “off” would change the way people have grown accustomed to using the function and cause millions of people to have to go in and change something to fix a “problem” that very few will experience.
Maybe a disclaimer at the beginning of Mature rated games would suffice, but changing the entire function of the button seems to be a bit too much for such a small problem.
Getting banned for having explicit content saved to a private cloud server is something I've never heard of from any of the main cloud service providers, especially when it's content approved by the provider. I wouldn't be surprised if most of the people banned didn't even know they were doing something that could result in a ban.
I’m not sure where u got this from but this isn’t happening on Xbox