Thanks a lot for the clarification. If you don't mind a follow up, what happens if the blockstream server crashes (as a theoretical possibility, however unlikely)? 

I can still recover my on-chain coins, I assume, as those UTXOs are in the Blockchain, not on Blockstream? 

But my lightning and liquid sats are gone? 

spiderman

bitcoin_beginners

Can BIP 39 Words Restore Liquid and Lightning Coins on Blockstream Wallet?

Yes, your seed is sufficient to get all on-chain and off chain funds back. The lightning Integration of the blockstream wallet is done via greenlight. This means that the node and all it's metadata is running on blockstreams infrastructure, however without keys. Those keys are running in the app. So the node runs the lightning protocol, if the node needs signoff from the keys, i.e., whenever funds move, the request is sent to the wallet, which independently verified it, signs it and sends the result back.

This means that the keys are sufficient to recover funds because all non-derived data is safeguarded on the server.