That bad encryption was not cracked for now.
There’s no need if you control the server.
End to end encryption was created specifically so that the server could not access the data.
So how many people use E2EE with Telegram?
And their ToS forbids alternative clients doing that. Say, using Pidgin with PGP or OTR. Since Pidgin plugins for TG and these exist, it’s not a limitation for me, but most people, again, don’t use Pidgin to chat in TG.
Alternate clients are blocked from using that functionality because they may include ability to capture data somewhere, for example taking a screenshot of a protected chat.
That’s right, but it’s not properly implemented in Telegram. https://eprint.iacr.org/2015/1177.pdf