In general, I would agree that someone in this way only risks privacy, but this is the case with any software that we use as an interface, whether it is Electrum or Ledger Live. The real danger in all of this is fake software that tries to trick the user into entering their seed because there is some kind of critical vulnerability in the HW. For those who don't know how to deal with seed (and there are too many of them), it can often be the moment when they get hacked, and then they blame everyone else but themselves.