They don't need to update their privacy policy because they never have access to the profil information.
Technically, the encrypted profile information and your messages (when they are in transit to your contacts) are being stored on their servers in the exact same way. The only difference is that messages are deleted afterwards whereas your profile is stored permanently until you decide to change it. That doesn't make the profile information any less secure, though. Yes, maybe in 20 years someone will be able to break AES-256 (or whatever symmetric encryption algorithm they use) and then the stored cyphertext version of your profile information might be valuable. Personally, I doubt it. But even if I turn out to be wrong: The possible attack vector against your profile information is the same as for messages: After all, tomorrow Signal could get convinced by an intelligence agency to permanently store all your encrypted messages from now on and then the exact same risks of AES-256 getting broken would apply.
Conclusion: When Signal says they're not collecting any sensitive information, they mean that they themselves don't have access to any such information because it gets encrypted. This is the promise of end-to-end encryption. They're not promising anything beyond that.
In particular, they can't promise that the encryption will never get broken. No one knows. And no one in their right mind would promise anything like that. But at least they do everything to mitigate that risk by openly publishing all their cryptography algorithms for peer review and actively participating in scientific research surrounding that topic.
> I still run into people who have no idea that Signal is storing their profile information and their contacts on signal's servers
The precise meaning of the phrase "Signal is storing their profile information on [their] servers" vs. what the average person will actually understand here, are two entirely different things here: Most people will think that Signal stores that profile information in cleartext on their servers – because that is the current status quo with almost all popular online platforms – when in reality this is not the case.
Normally, I would be saying at this point: Please stop spreading FUD. But I do agree with your statement that
> If you're promoting your service to people who risk their lives and freedom by using it you need to make it 100% clear to them what their risks are.
Signal could indeed do a better job here. In view of the above, however, I'm having the feeling the risks weren't really clear to you, either? (No offense)