I agree that them having users’ phone numbers isn’t ideal. There are other identifiers they could use that would work just as well. However, both the client and server are open source, so you can build, at least the client, yourself. If you can content yourself that it does not leak your ID when sending messages, then you don’t need to trust the server as it does not have the information to build a graph of your contacts. Sealed sender seems to have been announced in 2018, so it’s had time to be tested.
Don’t get me wrong, the fact they require a phone number at all is a huge concern, and the reason I don’t really use it much, but the concern you initially stated was addressed years ago and you can build the client yourself to validate that.
It depends what you want to do with it. If it’s just for storing files/backups then encrypt them before uploading and make sure the key never goes anywhere near the VPS. If it’s for serving up something like a simple website, you probably care more about data integrity than exfiltration, so make sure you have the security, including selinux or equivalent, locked down, and regularly run integrity checks. If it’s for running something interactive, or where data will be generated or downloaded to the machine, you’re out of luck, there’s no even theoretical way of securing that against an adversary with that much access.