The design is pretty clearly to support the bog standard backup use case of "something happened to my device, I got a new one, I want my old data".
It would be nice if they added an option to also encrypt backups, although I think it would be non trivial to design where the key material would live. (phone enclave? Multiple devices? adding/removing devices? etc) Not to mention just having the option might cause more harm than good if people turn it on and regret it.
I think their design philosophy here is likely "let's err on the side of smooth UX and let the 'end-to-end encryption is srs bzns' loonies go to signal"