I hadn’t thought of it in that way, but I see your point. Totally valid. At least they’re not abusing “literally” in the same phrase. 
I described my experience with it (when I finally got it to work for the first time) in another topic:
I actually thought it was pretty 
cool when I saw it work on my own camera for the first time, but it’s not a feature I imagine I’ll use a lot.
I haven’t played with it a lot but in my limited experience it kinda seems to do both, just depending on what’s causing the most motion—maybe like what’s the largest blotch of changing pixels? The cameras without Edge AI are already doing motion detection with pixel differentiation, though, so I don’t know the answer to that or why Wyze would say that Edge AI is present on Cam v4 for “supporting Smart Focus.” I don’t have the answer. That’s a good question.
Sometimes when I load a Cam v4’s live view, I’ll see that Smart Focus has zoomed in on a portion of the view even when no person is there, usually just a blowing tree branch or something. Perhaps that’s why it’s still labeled as a “BETA” feature. 
I don’t think that’s what they’re saying, or at least that’s not how I’ve read it. Elsewhere I’ve referred to how at least one Wyze Help Center article refers to “the full feature list of Edge AI”. Based on what I’ve read in Wyze’s communication and my own experience, I still think that when I enable Smart Focus I’m using one of the features on that Edge AI list, and I don’t read “Edge AI” as being equivalent to “Person Detection”; I think Person Detection is only part of what Edge AI is supposed to offer.
I don’t know the technical details, though. That’s just how I read it, and I think the answer to your question might be that only part of Edge AI requires a subscription (which seems consistent with what Wyze is apparently trying to say), but that’s just an educated guess. I think that’s another good question to ask.