I think that's a given unless you are able to spend the tainted UTXOs directly for goods/services (then it could get arbitraged).
If you wanted to push everyone into paper Bitcoin ETFs (which they do), you'd make this extremely annoying for people (frozen coins, more taxes, etc.).
Everyone who lives in the EU and has had their Bitcoin frozen due to the "travel rule" or any other bullshit reason knows what I'm talking about.
Sadly, in the current regime 1 BTC is not equal to 1 BTC in some cases. You have "compliant BTC" and "non-compliant BTC". This will only get worse.
