Yes. And technically, from a privacy perspective, it's even worse than that. What's additionally happening is they're still 'syncing' back to Apple servers via APNS (and to Alphabet servers via Firebase on Android)—even with notifications completely disabled, that's correct.
If the app generates them, the OS receives them. That's why the Signal app offers this setting.
If the app generates them, the OS receives them. That's why the Signal app offers this setting.