That's not an counterargument at all. Its so bad that I won't even go into it. Rethink

Buying crypto with fiat in person is a very bad idea in any aspect. So that's your fault. And why should they stalk you, sit all day in front of the computer and watch your transaction on block explorers without any clues where your sending your money to and for what reason. The most unrealistic scenario I've ever heard off.
Privacy is not a criminal tool. As already someone stated here its dangerous to see it that people are using and abuse it for making crime or even judging their crimes.
I don't have what to rethink because I already know BTC is used way less often in crimes than fiat is. With mixers, even less. Prove me wrong

Buying crypto with fiat in person is the way Bitcoin was created to be. Peer-to-peer. In real life or virtually with multisig and smart contracts, crypto makes this possible. And that is not my fault since this can happen with exchanges as well. Once you create an account on an exchange and deposit some BTC, expect them to spy on you.
Blockchain analysis companies have developed API tools that work automatically. You don't even need a human operator to spy on all your customers. We're in the era of technology and AI - it works out of the box with no human needed. Unrealistic? Say that to all those dust attacks and all those people who've got their accounts banned on exchanges for their history (or even future) transactions. Some exchanges literally look into your deep wallet history. They can, and they care.
Its a peer-to-peer digital cash system. In terms of network and technical design. Not in terms of meeting in person to sell or trade it.
Then proof the exchange that the coins your owning are not from criminal origin and your good to go.