I think it’s funny that they think Google cares at all about the implementation details of your service. The only thing that matters to app reviewers is what the user sees when they use it. If you make your app technically unmoderatable, impossible to remove illegal content, or impossible to
respond to DMCA requests you don’t get to just throw your hands up.
It’s not that the app can be used to view the content. It’s that Matrix apps are basically matrix.org clients with an option to use another home server if you want. If you followed the default onboarding you get a Matrix.org account. It’s the default blessed server from the project. So Element will now forever get blowback from public content hosted on Matrix.org.
Element is a Matrix.org client that lets users choose another server if they want. And Matrix.org hosts public chatrooms. So the fate of Element is tied to content hosted by Matrix.org.