I've heard this argument before and it's bunk.

Signal made it very clear when a message was unencrypted. And if that was really an issue, make the indicator more clear/obvious.

How many users of Signal lacked the ability to know this, especially since any less-technical people were likely using Signal because someone like us got them to, so we would be explaining the difference, as getting people to use the encryption is our goal.

Also, how would Signal know this issue? Were they monitoring users?

It really sounds like a non-reason. It doesn't add up.