Exactly, centralized & controlled is a big issue - but WBTC (Wrapped BTC) on ETH also made a good solution with their custodian system, which I think is an excellent solution.
No it's not excellent solution, often times fees are much higher than on real Bitcoin chain and there is no mentioning in your diagram about this wbtc that is also centralized and controlled by some custodians.
I did not mean we would use WBTC as a custodian, just saying that their solution of custodians holding the BTC is a good solution. Might have expressed myself confusingly.