Only good if you and your communications partner use Tor. Otherwise my ISP/your hoster knows we are communicating whenever my IP connects to the SimpleX/XMPP ports of your server's IP.

If I connect to Signal servers there are so many potential users I might be texting it is harder to track from the outside.

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You can use tor, but xmpp doesn't leak metadata like signal and simplex is solving it with the next version. Relying on signal is a temporary solution and doesn't give you the freedom to self-host

But if I have my own xmpp server and you also host your own and then there is a connection from my xmpp server to yours on the xmpp port. What does that look like to a network observer?