But if you borrow BTC from a bank to make a purchase, the seller will expect to receive the actual BTC, not a BTC bank credit. So the scope for FRB is far more limited.
You won't borrow BTC from a bank, the bank will issue a credit card with which you will pay for your purchases. Whether this bank (or any other bank for that matter) actually has all the BTCs it has credited you with is another question... So, unless there is a Central Bank which has set the economy on a Bitcoin standard (with all ensuing dramatic consequences), banks will still be able to create more money (virtual BTCs) than there are bitcoins out there...
If you agree with this, then the fixed supply nature of Bitcoin becomes unnecessary and detrimental here
Not for large purchases by individuals or companies. Suppose you are selling a house. Would you prefer to accept BTC or a bank credit denominated in BTC? Far more likely the former. c.f. cash or even gold.