Fatigue detection is a real thing that doesn't use the type of AI that people think of when they hear that word today most often. It's not language based but instead it's able to recognize faces and posture, tell where your attention is focused, and recognize signs of fatigue like head drop, eyes closing, and attention drifting from the road.
It, along with other attention based driver safety features, are real and effective and can be done on device with a computer with less power than a modern cellphone.

It is, however, at least a little creepy. It's made a lot more so by it not being disclosed upfront with disclosures and full user awareness. It should be explained by both the website, the car manual, the salesperson and the car itself exactly what it's doing and where any video data is being sent. It's probably processing the video locally and at most sending telemetry about which driver just sat down and such, but 1) you might not want that 2) unless they actually tell you that you don't know.

It's not paranoia to want an explanation and appropriate assurances, or for it to be in your control. You don't need to assume it's the worst case for that to be true. It's probably a real safety feature with a couple of quality of life features taped on so people can see it do something, since you don't really see a passive safety feature. But without actual communication you don't actually know that.