It asks for a phone number when you sign up, but you don't have to share the phone number with people you want to add as a contact/share it in groups.

For a lot of people, Telegram does a good job of being "less evil than Facebook Messenger", and private in ways that matter to them. I'm more worried about some nutcase from a video game meetup group getting hold of my phone number than I am law enforcement finding out I was in that video game group in the first place.

I have a Matrix server and an XMPP server for 'truly private' communication anyway.