For example, even with non-reused addresses, compliant participants may report their addresses to a risk-scoring service. If you go outside that "system", boom your coins risk score goes way up.
This is not sustainable in the long term.
All that's required is that users put one non-reporting entity between every transaction between reporting entities. A non-reporting entity could be anyone or any business.
How are you going to get people to do that? Joe Sixpack either buys coins from Coinbase or gets paid in those coins by his employer using a compliant payroll service, those coins go into his coinbase or circle or other compliant wallet. He spends those coins at Overstock or some other retailer using a compliant payment processors.
There is zero incentive for any of these parties to put a non-reporting entity in the middle of their transactions. At best it adds inconvenience and extra cost for no gain. At worst it impairs the acceptability and therefore the value of their coins, which is actually an incentive to not do it.
Coinbase et al. may attempt to keep their users inside a walled garden that is only allowed to transact with other people in the same walled garden, but they won't get away with it in the long term.
I'm not so sure. That's certainly now how things are going now.