Yes, Chatto's core system does not use e2ee. This is by design; if there ever are e2ee features -- and chances are good they will, in some shape -- the encryption will be layered on top of that (encrypted message payloads and such.)
Yeah, there are definitely valid contexts for hosting chat like this. E2EE has the benefit of not needing to trust the host, which I personally like but I can see this being fine or even wanted for lots of cases.