This is not quite true. I never gave anyone (especially not the users of WhatsApp or Telegram) permission to upload my personal information to any cloud services. You can not actually imply that permission from all contacts merely by asking the user.
this also enables us to use proper names in notifications on the iPhone
I do not know enough about the iOS internals, but my naive assumption would be that after receiving a push notification, you can run code locally (like get the contact name from a local database), not merely get the notification displayed by the OS.
We will add another prompt in the coming version.
This is an improvement, but unfortunately does not tackle the first issue I mentioned, with implying consent from the actual contacts.