- Whether or not Signal's server is open source has nothing to do with security. Signal's security rests on the user's knowledge that the open source client is encrypting messages end to end. With that knowledge, the server code could be anything, and Signal inc. would still not be able to read your messages. In fact, having the server code open source adds absolutely nothing to this security model, because no matter how open source and secure the server code might be, Signal inc. could still be logging messages upstream of it. The security rests only upon the open source client code. The server is completely orthogonal to security.
- Signal's decision to keep early development of the MobileCoin feature set private was valid. Signal is not your weekend node.js module with two stars on Github. When changes get made to the repo, they will be noticed. This might mess up their marketing plan, especially if they weren't even sure whether they were going to end up going live with the feature. Signal is playing in the big leagues, competing with messengers which have billions of dollars in marketing budget, will never ever be even the smallest amount open source, and are selling all your messages to the highest bidder. They can't afford to handicap themselves just to keep some guys on Hacker News happy.
- Signal's decision to keep development to the (private) master branch, instead of splitting the MobileCoin integration into a long-running feature branch is a valid choice. It's a lot of work to keep a feature branch up to date over years, and to split every feature up into the public and non-public components which then get committed to separate branches. This would greatly affect their architecture and slow down shipping for no benefit, given that the open sourceness of the server is orthogonal to security.
This true only when you are exclusively concerned about your messages' content but not about the metadata. As we all know, though, the metadata is the valuable stuff.
There is a second reason it is wrong, though: These days, lots of actual user data (i.e. != metadata) gets uploaded to the Signal servers[0] and encrypted with the user's Signal PIN (modulo some key derivation function). Unfortunately, many users choose an insecure PIN, not a passphrase with lots of entropy, so the derived encryption key isn't particularly strong. (IMO it doesn't help that it's called a PIN. They should rather call it "ultra-secure master passphrase".) This is where a technology called Intel SGX comes into play: It provides remote attestation that the code running on the servers is the real deal, i.e. the trusted and verified code, and not the code with the added backdoor. So yes, the server code does need to be published and verified.
Finally, let's not forget the fact that SGX doesn't seem particularly secure, either[1], so it's even more important that the Signal developers be open about the server code.
[0]: https://signal.org/blog/secure-value-recovery/
[1]: https://blog.cryptographyengineering.com/2020/07/10/a-few-th...