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There is no button I seem to be able to long-press on iOS Signal that gives me that option. Can you be more specific?

They're talking about the Android app. In Android the application which sends messages can be replaced, and so Signal offers to replace it, as a result it needs to be able to send old-fashioned SMS messages when the correspondent doesn't seem to have Signal.

Your iPhone doesn't let anybody do that, just like it doesn't let Mozilla provide a different web browser and so on. This has upsides and downsides for security which I'm sure you've already thought about, for me it's a good reason not to own an iPhone, but the rationale for the opposite decision is sound.

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