Molly has been running just fine as a project for quite a few years at this point. Signal doesn't block them. I think it's fair to say they are fairly strongly opposed to them (for somewhat defensible reasons), but no, they've been fairly nice in allowing other clients.

Signal does not aggressively block non-official clients. I constantly use a modified version of Signal Desktop containing a small set of my own patches, and it always works fine. Also, while autoupdate is on by default for the Signal client (and it includes a time bomb expiration to attempt to "force" you to upgrade regularly (removing this is one of my patches)), you are free to turn it off and remove their ability to modify the code on your own system.