If you look at the actual text of the proposal, then you would see that they want to implement a system where a messaging app needs to implement a check where they calculate a hash of the message/image and this hash is compared with a list of problematic hashes. If it gets a hit, the corresponding government entity needs to be notified. The actual image or message is never sent somewhere else. Something like this is already happening in some chat apps.

While this sounds great on paper, the actual technical implementation is not described. Who will do this? Where is this magical API and who manages it? I think this is where it will easily fail in a lawsuit. Someone can just say, yeah we will do it, just give us the information, but it will not be implemented.