Known by whom to contain legal images? The "reviewer" might well be a retired Pediatrician who can identify the age of the subject by looking at the photographs and will be extremely accurate.
iCloud (at least for photos) is (effectively) "end to end encrypted". All photos are encrypted or decrypted only on the device (or after being downloaded to a browser), they never exist as human viewable files on iCloud. No one, except the owner of the account, can decrypt the file.
This is why the checking for illegal file has to happen before they are upload. It cannot be done on the server, the encrypted file can never match the hash. What Apple has done that is real genius is that for each image identified as illegal, a part of the key is encrypted and sent with the file to Apple. After a threshold is met, the account is locked, the user notified of the appeals process, and Apple can decrypt and have the files verified. 1 or 2 false positives changes nothing.