There are levels of illiteracy. Most everyone has some literacy but the classifications are not very detailed, so completely illiterate may include being able to read a menu and choosing simple items.

Following an instructions manual for assembling/mounting something is much harder. Because of how frowned upon illiteracy is people who are illiterate get good at hiding their illiteracy.

I am only going to give clarification on the small part I feel confident about. They do not save while videos, photos or sound that they record secretly. They somehow condense it onto what I imagine to be some kind of tag system. So rather than saving the raw sound of you talking about something they just record that you said that word X times or at timestamps a, b and c.

I think Google records sound constantly when you have chrome open or from your android phone but they do not save everything they record. Only what they think is important enough to keep on record. I also have no clue if they ever throw anything away after some time.