I cant seem to set any app or user metadata when signing up a user, and looking at the logs the rules is not firing at all. Only when I call the webauth.client.login will the rules fire, and not on webauth.signup.
Yes, that is expected. Rules execute after the initial authentication step is completed; for a database connection user that would mean that the user provided correct credentials (username/email and password); they do not execute at user signup.
If your use case is around database connections you should check the pre-registration hook; if it’s independent of connection you may want to consider a rule that only performs that logic once based on a certain flag that indicates that you’re treating this execution of rules as the first with regards to metadata initialization.
Cheers! That clarifies a lot, and thanks for redirecting me 
Cheers! That clarifies a lot, and thanks for redirecting me