Lumo never promises encryption while processing a conversation on their servers. Chats HAVE to be decrypted at some point on the server or send already decrypted by the client, even when they are stored encrypted.
Read the marketing carefully and you will notice that there is no word about encrypted processing, just storage - and of course that's a solved problem, because it was solved decades ago.
The agent needs the data decrypted, at least for the moment, I know of no model that can process encrypted data. So as long as the model runs on a server, whoever manages that server has access to your messages while they are being processed.
EDIT:
Even found an article where they acknowledge this [0]. Even though there seems to exist models/techniques that can produce output from encrypted messages with 'Homomorphic Encryption' [1], it is not practical, as it would takedays to produce an answer and it would consumes huge amounts of processing power.
