When a user of one of these coins wants to exit the system (to compact its history, to move to another system, to spend plain Bitcoins, or for any other reason), they form a final transaction paying to a Bitcoin address, and run the witness on their transcript under SCIP and produce a proof. They create a Bitcoin transaction redeeming the coin providing the proof in their script (but not the transcript, thats kept private), and the Bitcoin network validates the proof and the transaction output. The public learns nothing about the intermediate transactions, improving fungibility, but unlike other ideas which improve fungibility this idea has the potential to both improve Bitcoin's scalability and securely integrate new and innovative alternative transaction methods and expand Bitcoin's zero-trust nature to more types of transactions.
The user who can create the Bitcoin transaction that redeems the coin back into the Bitcoin network is the one who holds the privkey that corresponds to the pubkey at the top of the coin's transcript in the off-chain system? If I understand correctly then the Bitcoin nodes cannot be completely oblivious to the off-chain system. So can you please elaborate on what exactly do the Bitcoin nodes verify when a user exits the off-chain system? You've mentioned in the first paragraph that this can be achieved as a soft-fork to Bitcoin, are you sure about that?