good question, the problem is that encrypted group chat proposals are either limited (NIP-17) or too young (MLS); also both are not very widely supported. nostr:npub1h0uj825jgcr9lzxyp37ehasuenq070707pj63je07n8mkcsg3u0qnsrwx8 has written very good threads on the topic. When I can make something like Chachi (chat + all the other kinds) in a private way I'd be glad to implement it. The best chat apps for privacy are nostr:npub1h0uj825jgcr9lzxyp37ehasuenq070707pj63je07n8mkcsg3u0qnsrwx8 and nostr:npub1tm99pgz2lth724jeld6gzz6zv48zy6xp4n9xu5uqrwvx9km54qaqkkxn72 at the moment, but I hope nostr:npub18stt78efprta2el02tzgnez6ehghzgtt000v58967wvkgezjmprs0n7h7u can be a serious contender soon.
Discussion
I agree. NIP-29 group chats are more like Telegram groups (though without encryption), while NIP-17 encrypted group chats are simple to implement but not convenient for managing group members, and suitable only for smaller groups.
MLS group chats are easier to manage group members and more suitable for larger groups, but the implementation is more complex.
The next version of 0xChat will implement MLS group chats, it will be in beta.
Once your group gets over 10 participants the likelyhood that one or some of the encryption keys haven't been leaked / compromised is not good anyway.