Non-E2E with black box server code like Telegram is far more concerning, in my opinion. With a system like that, it would be trivial to backdoor and leave behind no evidence after the fact.
> That would be putting their reputation
Does Facebook have any reputation left?
Most people still think of WhatsApp and Facebook as separate. For a while, WhatsApp displayed a Facebook logo for a second whenever it started (and given how Android works, opening WhatsApp does not necessarily mean starting it, most of the time it just switches to an already started process), but even that does not happen anymore, since it was replaced by a "Meta" logo (and most people do not associate "Meta" with Facebook).
I guess, by outlawing them. Think of the collateral damage. For ex, unavailability of Signal means MobileCoins in wallets of its Indian users become inaccessible (theoretically, since Signal is a non-custodial wallet) if they don't get it out in time before the ban, so there's something for Signal to think about.
Also, I'm convinced that if Signal were to become popular they'd probably sell it to some commercial provider, since the cost of maintaining a service used by hundreds of millions if not billions is extremely expensive.
WhatsApp is an entirely different matter. Hundreds of millions of Indians probably use it and if the company were to suspend service because the Indian government mandates a backdoor all hell would break loose!
For the same reason both Australia and the UK haven't as of yet forced WhatsApp to install a backdoor, even though legislation forcing them to do so is already in place there.