Yes, the Nebo approach needs to record your ink strokes, since the order, direction, velocity, etc all factor into how Nebo decodes your handwriting. It's different than analyzing a static picture. But we are seeing other server-based approaches that do analyze a scan or picture. Google Lens does it, and now Apple started to do it (though in Apple's case it's on device?)
Many of these handwriting discussions here began before Apple introduced Scribble. Scribble is best — so far — with short bursts of text, not novel-writing, to choose an extreme example. So people who prefer their primary text input to be longhand — when entering lots of text, notes, creative writing, etc, are not happy yet.