TL;DR: WhatsApp is E2E encrypted, but that doesn't mean there are only 2 ends.
Translation: there are two ends, but one of the ends can send it to yet another end. That sounds like there are more than two ends.
It's essentially a forward to the party that supposedly can't see your messages, breaking what people understand by E2E.
Today this behavior is triggered when it's reported, tomorrow it'll be when the government, or worse, some AI, flags a user. You share a groupchat with the wrong person, or they have you in their contact list, boom, eavesdropped.
But some people will still claim it's only 2 ends just because it's not forwarded 100% of the time. I guess it's matter of semantics.