A long standing physical bitcoin mint with an impeccable track record has a one in a trillion glitch (unbeknownst to anyone) on their automated assembly line. The bitcoin was allocated to the physical coin but the private key was lost forever due to the glitch. The coin circulates in the market, and everyone perceives it's worth a bitcoin. Before it is opened for the world to recognize the private key is corrupted, is the bitcoin dead, alive, or both at the same time?
In theory
every physical Bitcoin that contains an obscured hidden private key could be considered to be in that uncertain state until the private key is confirmed. It is our implicit
trust in the coin minter that they have attached the correct private key to a wallet that contains the face value in in BTC under the label that gives the coin it's physical value.
The same could be said of printed dollar bills that are backed by a gold reserve. It is our trust in the government that each printed note is backed by physical gold that gives it the same value.