There is already TLS used by relay

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So, the communication between relays can't be intercepted and read, right?

Couldn't a relay-group client just encrypt all note content, by default, so that only the people sharing that relay can read it? That way, even if it gets out, people just see gobbledygook?

TLS and end-to-end encryption solve different problems, but indeed, for the user, having E2EE is more preferred.