Unless I’m missing something, your mproto link only covers transport level encryption not storage.

It doesn’t include E2E encryption in the scheme only client to server.

Whether the server stores it as plaintext or not, is moot to the point of having telegram itself be able to see the chats because they hold the encryption keys of the server and therefore can be made to comply with legal requests.

The person you replied to may be incorrect on the aspect of plain text but imho they’re right that it’s not really relevant in this context.

Encrypted storage would be relevant for the case where a server is compromised by a hacker.