Most likely changes the preview on the client-side, but the message is still full on the server-side

Correct, parent comment is spreading misinformation/false sense of security.

Signal does not have the plaintext of the messages and therefore could not send it as part of the notification.

Apparently if I’m reading the work of others correctly a notification component and subsequent other interaction logs, in this case that the notification was not generated, is also logged in knowledgeC pointing to at least some metadata of non-notified messages logged.

The signal app does and does the OS once the notification is displayed. The latter is where this issue originates

Is setting it from Signal directly more trustworthy?

Or maybe it’s impossible for iOS to store the preview content if it never showed in the first place, but not sure if it’s even documented.

I wish it can be disabled for particular apps and not an all or nothing situation.

Can be!

Settings > Apps > choose an app > Lock Screen Appearance: Show Previews - Never

The message text is still sent to the push notification server from the app's infrastructure - this setting simply stops the phone from displaying the message.

The app itself must choose not to send the message text in the push notification.

That setting is available for each individual app.