While OTR is a possible solution, it has its own can of worms (multi-device, offline use).
Besides of this, Gmail xmpp silently fails if the other party upgraded to hangouts.
[0] https://github.com/stpeter/manifesto/blob/master/manifesto.t...
The issue is that you see 3 people are online, you can also receive their messages, but they can't see anything you write[1]. This behavior is worse than outright blocking, because it creates confusion at first seems like everything works and why people are complaining, then makes you suspicious that perhaps Jabber is broken, and in order to talk to your friends you might start using gmail.com.
[1] Initially this happened to anyone who converted to hangouts. I don't think there's option anymore to opt out from hangouts and get back to GTalk.
It's possible that they grandfathered you in, if you were already federated when they put on the breaks, and your server wasn't guilty of sending spam.
Or it's possible that I'm wrong and they just got really aggressive about banning new servers if anything even remotely spammy came out of them, and it's really the spammers complaining that "Google won't let anyone new federate."
[1] https://cloud.google.com/appengine/docs/deprecations/xmpp