This already happens, with centralized exchanges choosing to seize coins and freeze accounts if you deposit or withdraw directly to a casino, sportsbook, darknet market, coinjoin, and so on.

It's an untenable position for a couple of reasons. First of all, the majority of bitcoin in circulation have, at some point, passed through one of these "undesirable" services. Centralized exchanges cannot ban them all since they would rapidly go out of business. So how far back do they look? 5 transactions? 10? 20? So if you bounce your bitcoin around for n+1 transactions then suddenly they become "clean" again? It makes no sense. This is only going to get worse as time goes on, with more people using bitcoin and fewer bitcoin entering circulation means pretty much every bitcoin which isn't in a long term hold will become "tainted" in one way or another.

Secondly, people are getting fed up of this kind of behavior. The number of DEXs and the volume they are handling is steadily growing. Mixer use is increasing. Coinjoin is becoming mainstream. It is becoming more and more difficult to track "tainted" bitcoin if you are intent on obfuscating them. Again, centralized mixers cannot ban every coin which has ever been through one of these services.

The community should do its part and stop supporting centralized services which dictate what you are and are not allowed to do with your own money.