Looks like the FBI designated FaceApp as a threat because of its crazy data policy and its Russian origin. Even though I think it's a really shady app, that's a pretty low bar.
Hosting in Russia is expensive and does not provide any advantages, such as dynamic routing that is crucial for world-wide app. Most developers use it to comply with Russian standards: you only need to store information about Russian users on Russian servers. In addition, currently in Russia there are no good alternatives for reliable cloud neural network inference.
But I can’t understand the negative media about the application, based on the founder’s country of origin. I argue that this is discrimination because there is as yet no evidence of breach of confidentiality.