There are other apps that use universal e2e encryption and have not been banned by Apple. Also if someone idi want to use Telegram for seedy purposes, they still can by enabling full security, so it’s pretty clear this excuse is flat out bogus. Otherwise all the same arguments would apply to the other apps.
A thought: I hear that most of the complaints about “adult” TV channels crossing the line from “broadcastable” to “violating obscenity laws” are made by their competitors. Perhaps a similar thing happens here? That at least one of Telegram’s competitors constantly look for reasons to get them blocked from the App Store?