What you asked is, "Is Liquid custodial or not?", it is custodial. But, to me, it is worse than other custodial services and it is just one of shitcoins. Liquid clouds #Bitcoin-ers' eyes. I dare saying it is a #Bitcoin affinity scam.

LN is layer 2, not product of one company. Custodial LN is product. Some people run their own LN nodes. Some people use custodial LN with considering tradeoffs. To me, it is acceptable whether I use or not.

Liquid is different from LN. It is hyper centralized in the first place. It is product of Blockstream. Some people use Liquid with considering tradeoffs. To me, it is not acceptable. Stacking liquid instead of #Bitcoin due to the low fee is equal to stacking paper gold instead of gold due to the interest. It will repeat the history.