No, Matrix isn’t the best in terms of privacy. It is a metadata disaster and most other platform are a lot more performant.
Matrix’s E2EE does not, however, encrypt everything. The following information is not encrypted: Message senders, Session/device IDs, Message timestamps, Room members (join/leave/invite events), Message edit events, Message reactions, Read receipts, Nicknames, Profile pictures
XMPP is the true and the OG federated and truly open solution that is very extensible. XMPP is tested, reliable, secure and above all a truly open standard and decentralized it just lacks some investment in better mobile clients.
What most fail to see is that XMPP is the only solution that treats messaging and video like email: just provide an address and the servers and clients will cooperate with each other in order to maintain a conversation. Everything else is just an attempt at yet another vendor lock-in.