How can a service like Signal live and die by the trust of its users when they openly lie to them. Signal refuses to update their privacy policy to warn users that they store sensitive information in the cloud (and more recently, even the contents of user's messages in some cases).

Lying to users by saying that signal doesn't collect or store anything when they actually do doesn't sound like something a company who expected you to trust them would do. It sounds like something a company might do if they needed a way to warn people away from using a service isn't safe to use while under a gag order.