I have only found the source code for the Android and iOS application, but not for the server.

they host on AWS

You’re supposed to host on whatever you want.

data collection & sharing practices

Fork it if you want, remove what troubles you.

1 line below, you can read

Tech companies have said scanning messages and end-to-end encryption are fundamentally incompatible. Earlier this month, junior minister Stephen Parkinson appeared to concede ground, saying in parliament’s upper chamber that Ofcom would only require them to scan content where “technically feasible”. Donelan said in response to questions about Parkinson’s statement that further work to develop the technology was needed but government-funded research had shown it was possible.

In practice, I doubt this will have any consequence on encryption, as the title of this post suggests.

uMatrix seems to no longer be maintained or useful with uBlock Origin.

This is the correct answer.

Yeah in the long run it’s not really an issue, still each new website is a new guessing game of “what do you need to get working?”

Yes by itself it hardly breaks anything, but blocking 3rd party scripts and frames usually does. It’s no big deal, you can whitelist what is needed.