Why are they allowed to hide the real ask size? That doesn't seem fair for investors making decisions on whether or not they should purchase shares at a given price.
Exactly. It has no meaning except what traders want to attach to it. There's no evidence that MMs use "smoke signals" and there's no way to know if any one post is a signal.
Therefore, it's reasonable to conclude they're not signals on the basis that it's impossible to know if any share posting is a signal, and it's more likely that any share posting isn't more "special" than any others.