If someone generates the keys, same someone can decrypt. You cannot establish secure connection without someone's trusted server. By that definition same server could MITM you.
Every word in your first and third sentences are true. As written, your second sentence is iffy at best. [0][1]
However, the situation that those sentences describes does not apply to end-to-end encryption in Signal. Signal's crypto keys are generated on the end-user's device and never leave that device.
Signal neither requires OOB key exchange, nor does it require that you set a password to encrypt Signal data while on disk.
Because Signal has the same properties that you claim are indicators of a lack of E2E encryption, but actually is E2E encrypted, it's clear that these properties are not proof positive of a lack of E2E encryption.
So, I reword my previous question, which you failed to address:
What happens when a WhatsApp user gets a new phone, wipes his existing phone, or simply clears all locally stored WhatsApp app data? Does he get a new set of crypto keys, and are his conversation partners alerted of this fact as happens in Signal?
I ask because I don't use WhatsApp and don't know the answer to the question.
[0] Consider Diffie-Hellman key exchange. This is a method whereby two parties who wish to communicate securely over a hostile channel can do so without divulging any key material to eavesdroppers listening in on the exchange.
[1] To address the possibility that you're talking about key verification, rather than secure peer-to-peer session creation: if you like, Signal will show you the fingerprint of your encryption key. You can use that fingerprint to perform any OOB key verification that you want.
I do no such thing because I never made such a statement. I addressed your claim about mandatory OOB key exchange, not optional verification. To jog your memory, the two times I brought up OOB exchange were as follows:
>> Last time I checked whats app didn't require any kind of OOB key exchange, or ability to set your own password.
> Neither does Signal/TextSecure. Signal most definitely has E2E encryption. [0]
and
> Signal neither requires OOB key exchange, nor does it require that you set a password to encrypt Signal data while on disk. [1]
Notice that I talk about how Signal doesn't require OOB key exchange, not that Signal doesn't provide OOB key verification.