Read the whitepapers, the client side generates the keys and only transmits the public keys to the server. E2EE is truly end to end (as in client to client). Meta has no access to the content of your messages, same has been true for WhatsApp
I setup a similar system but with IPSec (https://github.com/jawj/IKEv2-setup) and Pi-Hole on DO. The best part is that the linked IPSec setup is trivial to install and also generates profile files that leverage the OS VPN capability in any iOS device without needing to install extra apps (and also force VPN connectivity by default so you don't need to remember to enable it)
There are more use cases where being able to prove cryptographically the identity of the device is very useful from security point of view, PD is simply one of them.
Exactly why cryptographic authentication is required. There are fuzzing devices today that present themselves as known VID/PID/HID combinations that have generic drivers in modern OS's and can exploit that.
One of the primary drivers for this is the power delivery - imagine a scenario where you have authentic power brick and laptop and buy a counterfeit USB-PD cable, power brick sends 100W over it and it results in the cable melting since it was really a $5 knock-off and you end up with a fried USB-C port in your laptop and possibly a fire. I'm sure most people would wish that the power-brick/laptop checked that cable is genuine and build to handle the power.