To your contacts; if I understand correctly, the public keys are uploaded to the server
> What happens if I'm on holiday in Paris and drop my phone, which is the only device I have with me, in the Seine?
1) use your recovery key (to recover your identity (prooven by private keys) from the server) - I believe it only works if you enabled server side key storage
Or
2) create a new identity (contacts will be notified)
Or
3) wait until you have access to another device again
Because it sounds like "we'll put them in a database so we can sell it" to me...