and finally a criminal who wants to buy illegal stuff (like a gun for example) can not pay with bitcoin because other criminal sellers don't accept bitcoin in return for that stuff, they want cash which is not traceable...
Cash
is the most common method, but a criminal certainly can pay for illegal goods with Bitcoin. Most darknet market sellers accept payment in BTC. Even though in most cases the criminal will know enough information about crime in their local area to pay for the drugs or guns with cash rather than converting it for a high fee, there may be cases in which there are inexperienced criminals looking for a means of searching for other criminals (via the Internet).
There may also be cases in which a criminal needs a way of sending money across the world rather than in their local area, and mailing huge amounts of cash across the world is somewhat more difficult than sending a BTC transaction.
As for KYC, the last time I was at an ATM it was pretty much anonymous. And daily limits become pretty much irrelevant if a user can stay anonymous, because the ATM doesn't know that it's the same user buying more BTC.