First, I speak Chinese, I understand what the IME thing is about. I agree that the "Incognito Keyboard" flag is a miscommunication, it should say "Politely tell my IME don't use my input to make smart suggestions", but IMO it is more of an OS issue instead of application issue. Android decided this should be called "IME Incognito Mode", but in reality it is not enforced and merely a hint to the IME. Maybe in addition to calling out Signal, we should also try to convince Google to change the name?
For "pop a dialog about this", I don't know, that's an interesting idea, but it is hard to draw the borderline if you pursue this route.
For example, do you know that Tencent QQ bundles a full-blown endpoint security solution trying to "protect their users" and warn them their computing environment is compromised? To the point it installs a kernel driver to do the detection. Most of my tech-savvy Chinese friends believe this is bad, not only because the possible privacy dilemma but simply because it is not an messaging app's duty to ensure the user have a safe computing environment. Surely Signal can pop up a dialog about the IME concern, but what's next? When somebody bring up an interesting cross app side-channel leak on Android, should Signal scan the installed package list, try to flag any "suspicious app"?