One more that is not mentioned is that safepal wallet and their app are sponsored and supported by Binance, and some people would say that is great news, but let's think about it.
Binance is recently kissing regulator asses much more than ever before, and it's safe to assume they are recording and reporting all addresses and transactions from safepal wallet.
They could in theory even stop or block access to safepal app and you won't be able to use wallet anymore if they connect you with any blacklisted or ''tainted'' addresses.
I would not trust seed phrase generated by safepal and I would send all coins to other wallet asap, but I could just be little paranoid about this.
For me at least, if you're offering wallet software the primary goal should be trust, as well as transparency. So, it should be open source. Although, for me I don't want to be pushed into a certain exchange or service, even if the exchange is like universally accepted as the greatest thing on the earth, I don't want to be pressured into it or only offered that option. By all means, link to documentation from multiple sources on what makes a exchange good, but definitely don't push a certain exchange. That's not because of the reasons you've mentioned above (those too), but the fact that we should be pushing for decentralisation, and therefore shouldn't be recommending a singular service.
I don't think you're being too paranoid. Safepal, and therefore Binance aren't exactly covering themselves in glory here. Although, unfortunately this is how they make money, and I suspect far more exchanges, and wallet software is indeed doing exactly the same.