What can they force those witnesses to do?
Convince all of them to censor some specific transactions?
20 years of jail
Even if they manage to convince 7 witnesses to do something that specific, all of those 7 witnesses will be replaced with hard-fork.
good luck finding people who want to spend the rest of their days in prison
With that Liberty Reserve example, you are missing the key point, they got busted because of money laundering, the same way how exchanges that doesn't require KYC will get busted with money laundering (or no bank will not accept them if they haven't done it). Byteball witnesses have nothing to do with fiat currencies and bots that accept credit cards also do KYC.
You can be right, but cannot guarantee it.
Decentralized, trustless systems are good because they create a situation in which malicious behavior causes losses, while following the rules makes a profit. Thus, the system remains protected even if each of its participants ready to become malicious.
Your model say "Government won't do any harm because i believe they won't do any harm".
In a crypto community, it is customary to trust systems based on economic initiatives and not on hopes.
Imagine situation. Satoshi, Ross Ulbricht, Mark Karpeles, Roger Ver and 8 other well known people are witnesses of Bitcoin. FBI arrest Ross, shut down SilkRoad. Do you really belive rest of witnesses will not be arrested?
Ross Ulbricht was not arrested because of Bitcoin, not even through Bitcoin. He was charged with drug trafficing, Mark Karpeles was charged with embezzlement. Roger Ver has convicted because of explosives.
"Cannot guarantee it" is not how governments work, you need to be convicted because of some law. Goal of Byteball witnesses is to have them around the world, so even if one gets arrested for something Byteball unrelated crime, they could be replaced. But if they are already in trouble with law then obviously they are not a good candidate for witness either, hence why they need to be public.