Signal is Private. Why do people think so?

while currently the core-engine is kept highly encrypted and we do not publish it

Why not? If you're 100% confident it's secure, you should have no issue making it public. If you aren't 100% confident its secure, not making it public is just dishonest and ends up hurting trust when something inevitably does happen. Also, what do you mean that the code is "highly encrypted"? First off, using phrases like "highly encrypted" and "military grade" are already massively suspicious because they're marketing terms that really don't mean anything. Second, keeping the code encrypted (at rest perhaps?) doesn't mean anything; and in order to run the code, it has to be un-encrypted anyway.

There’s a bit of a debate about pros & cons of opening it, regarding confidential comms.

How so? Here are the possibilities:

• Your code is 100% secure:
  • You don't release it: nobody trusts your claim of security (and fairly so).
  • You do release it: people can verify for themselves that your claim is valid.
• Your code is not 100% secure:
  • You don't release it: nobody trusts your claim of security (and fairly so).
  • You do release it: you can potentially have bugs discovered for you; or, people will fairly decide not to use an insecure product.

There's no situation in which not releasing code helps security or trust. Security by obscurity is not security.

Anyway we are independently pen-tested by volunteers.

Which is fine as one facet of being verifiably secure, but it's not suffucient. Code can have flaws that pen-testers will not (or are very unlikely to) stumble upon, even with fuzzing environments. The proper approach is to have the code audited and openly-available and to have independent pen-testing of the running implementation.

Not that I was a potential user of your software to begin with, but the way you're describing your product and operations really would turn me off trusting it.