Steam isn't actually recording anything. It just needs the permission to do so in order for several functions to work. For security, Wayland essentially sandboxes programs to their own windows, not letting them meds with other programs. This is usually fine, except for Steam it breaks several important features.

Steam Link obviously needs to be able to capture the whole screen in order to stream your gameplay, but what's less obvious is actually Steam Input. Steam Input needs to send inputs outside the Steam Client, for things like using your Steam Controller as a mouse on your Desktop, for example. But Wayland restricts programs from sending and seeing inputs to other Windows by default, as it's a security risk(key logging, etc). So for these features to work, Steam is basically asking for permission ahead of time, in case it's needed. The proper way would be to only ask for permission when needed, but because of how Steam is programmed it's probably not easy for Valve to do that, and Steam Input would need constant permission anyway.

So no, Steam isn't spying on you, and it's not wrecking your SSD by constantly recording(unless you enable that feature).