Just like any foss project, there some level of trust if you are going with the main distribution. In theory you are correct that not much is stopping them from releasing a malicious update, but because it is open source, soon enough people would notice that either they released new code that is malicious, or that the new version does not match the source code. That kind of scenario is known as a supply chain attack.
Since the code is open, you can literally read it for yourself to see exactly what the apk does. You can also fork it and modify it however you like, just like the creator of Molly did (Molly is a fork of the Signal client that adds some security features)
It is not as good as a decentralized system, and even though the server is open source, it isn’t self hostable (technically in an intranet you could but not easily)
But the signal foundation is a non profit with external audits and a proven track record with law enforced requesting data and getting basically nothing (If i remember correctly they only have your user to phone number relation and the last time you were online)
So although it is imperfect, it is an amazing solution that is almost the only 1:1 competitor to whatsapp/messenger/imessage that is privacy respecting, so I am very grateful for it’s existence.