If it were just to hide chats from other users, then yes I think the group/trust permissions work well.
For me, it’s more about hiding the chats from the admins/server. With this in mind, I don’t think the group/trust permissions will work as the chats will still be plain-text on the server.
Why does this matter? In my context, if Alice is talking with Bob about deep emotional issues in her life in a personal chat, I as the admin don’t want to have the ability to snoop on such a conversation and want Alice and Bob to both feel safe that I’m not snooping. Same reason I prefer Whatsapp or Signal and really don’t like IG or FB messenger, as I prefer knowing (strongly believing) that the admins can’t just read everything I type.