Those who are engaging on illegal activities by the use of bitcoin they are just putting themselves in danger. Bitcoin will having a negative mark regarding that once their government knows about it and for sure it is highly possible to ban btc in their country by the government.
The ones who use bitcoin for illegal activities most probably do not care for its reputation at all, because if they do then they would never use it for bad activities even after knowing that it can make it banned in the country because of that.