We consciously chose to prioritise building out Spaces over the last few months over E2EE UX as otherwise there's a risk of Discord becoming the de-facto home for open source projects, much as Slack started to be a few years ago - which would be catastrophic for open standards-based communication like Matrix.
Meanwhile, the cryptography team chose to focus primarily on implementing next-generation encryption (IETF's MLS) on Matrix rather than polishing the current behaviour - given MLS should both radically improve scalability, but also fix the majority of the edge conditions which are problematic for today's E2EE, or at least entirely switch bugs in the existing implementation for entirely different failure modes in the new implementation. We showed off MLS over Matrix last week (https://youtu.be/xn0fzyimycs?t=248), and we're now finishing the decentralisation component of it (https://matrix.uhoreg.ca/mls/ordering.html).
Eitherway, now that the Spaces beta is out the door, we're catching up on other UX issues, including E2EE. We also have more folks being paid fulltime by Element to work on encryption (amongst other stuff) starting in July. Talking of which, if anyone wants to get paid to make this happen sooner, Element is hiring at https://apply.workable.com/elementio.