No one would use a secure messaging service like Signal if you couldn’t find out who else was on it — but how can you trust Signal and others not to snoop when you submit your contacts for it to check against its list of users? You shouldn’t have to — it should be impossible. That’s the intention of an update to the app that makes contact discovery even more private.
It’s not that Signal or someone else was collecting this info to begin with — it’s encrypted the whole way, so really it’s already pretty safe. But say Signal were to be hacked or secretly taken over by the NSA. If this evil-twin Signal looked really closely, it could probably figure out who certain users were searching for monitoring for known hashes. That info could be used to de-anonymize users.