I don't know firsthand, but I believe they encrypt each message for the recipient, hence the scaling issues. They've been working on adopting MLS for 3 years, which will help a lot when it gets done.
encrypted group messages are an unsolved problem as soon as the group becomes too large afaik
the most important thing is that Matrix does not encrypt metadata
Matrix can be run Sovereignly. This helps as you are in full control of who you add into the rooms. Also, you can customize the server where no emails are used. It goes without saying don't dox yourself with a username. Also, if you federated with only other sovereign runners of their Matrix instance your attack vector is highly minimizesd.
It's ok for government, enterprise, etc., but not for casual users. nostr:nevent1qqsdy76ydvrej20uqm5j88m424pg4n0lu34vpdgfek42k7kyafuey6spz3mhxue69uhhyetvv9ujumn0wd68ytnzvupzq7wzets3f63g4xq7w4vmflnc2jj8x5s63532v6a6h8azfr4cyrlkqvzqqqqqqyhjv207