Mastodon announced they were awarded a €614k service agreement by the Sovereign Tech Fund to fund the development of new features and improvements, including end-to-end encrypted private messages.
I’d say Mastodon is first and foremost a public social media platform where you post things publicly for everyone to see, and the private messages will be a nice privacy upgrade in the future. Signal is 100% E2EE all the time. Just by that fact alone I don’t think Mastodon will ever be a competitor with Signal, because it’s not really designed to be.
That ‘all the time’ is the operative factor. I imagine unless every instance set up by anyone comes with E2EE enabled by default with private messages, Signal will always remain superior. But yes, people should still only resort to Signal. I only think Mastodon E2EE DMs even by default in the future will be used in a pinch if Signal app is not available or if the web platform is the only thing one can get access to.