It can signal a prioritization of values. Startups tend move fast and be flexible, and tend to have less customers so each one is more valuable. Established companies tend to move slowly and often provide worse customer service. By being honest about being a startup (or being an established company) expectations can be set between company and customer. Pretending to be established when in reality you are not seems disingenuous, and I think it's pretty easy to argue that being genuine is good/can be an advantage.

I don't really see how .com or not translates into being genuine or not.

Having been a founder for four years now, I have learned that the word "startup" usually scares potential customers. It is actually a good thing to seem more established than you are. However that doesn't mean you are disingenuous either. It is not black or white. You can look more established: .com domain, decent website, proper terms and privacy policy, no beta or "coming soon" wording on website, etc. However if someone asks directly how established you are, you are truthful.

What the potential customer wants to know is if they can trust you, and you won't be gone tomorrow. Therefore if you are truthful about the company's state, but seem like you are established then more people will look past the word "startup" since it will be obvious to them that you are serious and have some idea what you are doing.

In other words, you dont need to go around yelling at the top of your lungs that X is a startup. That strategy will most likely fail. But you certainly shouldn't deceive people either. There is a line.

It can signal value, though you might end up chasing worse customers.

I think it can signal breaking the mold. "We are new, we are not constrained to use a .com domain, come and find cool stuff here"

How does it signal value?