> All the vendors paraphrase user data, then use the paraphrased data for training. This is what their terms of service say.

It depends. E.g. OpenAI says: "By default, we do not train on any inputs or outputs from our products for business users, including ChatGPT Team, ChatGPT Enterprise, and the API."[0]

[0] https://openai.com/policies/how-your-data-is-used-to-improve...