They did it so that they could read the messages on their server. I have always assumed that they work for Russia or France, or something, as it just reeks of something a nation-state would like.
Telegram is encrypted to-and-from their server, but not E2E. Even the explicit E2E secret chats aren't TLS, they use their own weird protocol.
No, this has not been improved. Signal or other MLS-style messengers are much better.