The design is inspired by this[1], so I guess the developer simply agrees with the explanation that providing a cloud option is useful for its users as long as they don't use it for high-value amounts. It is a wallet data/file upload if I understand it correctly, not a seed backup. I believe the risk is still the same regardless, especially because the added pin protection is limited to 4 digits only. CMIIW.
[1]
https://bitcoin.design/guide/daily-spending-wallet/backup-and-recovery/cloud-backup/The increase of such services to the point of making them normal is disgusting, being your bank means that no third party can access your currencies, their argument that the automatic cloud reduces pressure and responsibility on the user is a weak argument, whoever cannot believe 12 words or was lazy let him use HIS BANK account, not a bitcoin wallet.
This point stopped me because it indicates indirectly that the wallet recovery data before it is sent to the cloud provider may not be encrypted and therefore it is an additional risk or greater trust in the cloud service provider.
While this is an easier way for users to set up a wallet, it brings in the potential threat of malicious third-party access. If a user’s cloud account is hacked, their funds could be compromised. This can be mitigated by encrypting the wallet recovery data before sending it to the cloud provider.