That's strange, it works by getting a hash of the image and then blocking that everywhere it can. But it's not necessary to look at an image to get that hash, they could just have some software that gets the hash from where it sits on your computer. That would avoid the risks of sending the image and the MASSIVE risk to Face Book of possessing those images.
That database of images would be a super honeypot to hackers everywhere. Not just to see nekkid girls, but to distribute those images and destroy public confidence in FB. The temptation would be too great.
I don't believe it.