My understanding is that it IS encrypted, and its supposed to use the Signal protocol (Signal developed it and released it for others to use)
The problems are with
- metadata (like the other comment explained)
- closed source, so we take their word on it for how it works. It's possible they're being misleading or doing something shady
See this image from a few years ago:
Note that signal does require this, which isn't in the chart:
- phone number (for now)
- last active date
- sign up date (I think)
This is the privacy community, and they were discussing the privacy aspect.
The concern isn't about getting your chats leaked, there's no incentive to just give away data that is collected. The concern is usually about a malicious group (company, government, criminals) abusing the data that they can get their hands on.