This will be useful to the user, but it won’t change privacy. Humans at OpenAI still have full access to your history, and this will only expand AI capabilities to tap into previous conversations. However, rogue and unlawful administrations will still seek to access that data regardless.
If this were true, the attacker would need to send prompts to retrieve information, making it an easy attack for the user to spot. However, if the malicious actor has the power to delete prompts and chats, I would suspect they already have access to every other chat.