Unfortunately Dash has the same fungibility problems no matter how much they try and hide it
How does it? I really want to know but nobody will tell me
Because if someone identifies outputs I own as being tainted then they can be blocked by merchants or exchanges or whatever.
"But you can just Darksend them!" is the reaction I have seen. Except that in Bitcoin you can send them to yourself and boom - new outputs.
But that would be recorded in the blockchain and easily followed through..
Does that make Bitcoin magically fungible?
No, because your transaction is easily traceable through the blockchain.
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Or what if I mix the outputs using BitcoinFog, does that make Bitcoin perfectly fungible?
Well, if you get away with it, then that transaction is 'funged' yes. But 'BitcoinFog' is a trusted mixing service that could be keeping logs, reporting up to your adversary or creating some other shitstorm that you might not care to weather.
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Fungibility is destroyed the minute you can trace transactions through the blockchain, it doesn't matter how you mix them and who is involved.
yes it does, that is the critical point. If you can mix the coins at will, in a trustless and sufficiently secure manner then there's your fungibility.
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Otherwise just use Bitcoin and send the funds back to yourself if they're tainted, no Dash needed!
Well, no. See above.