Don't forget to pay your capital gains on that lol. Seriously though, would buying a cup of coffee worth the paperwork.
It's not that complicated because you're not paying with Bitcoin directly. You'd sell BTC for USD on Bakkt. That's a taxable event, as with a sale on any other exchange. The cups of coffee you buy out of your USD balance aren't taxable in terms of capital gains.
Will they use a payment tool that requires kyc?
I'm assuming this is all through Bakkt, and I think Bakkt will require KYC.