But Lightning nodes charge fees if transactions are routed through them right? Then if there are high enough entities who are holding UTXOs they don’t like, demand will rise and therefore fees will rise. Unwanted UTXOs can merely be routed through Lightning, and leave those unwanted UTXOs with the routing node.
That's not how Lightning works. LN doesn't route UTXO's, that's not how it operates. It is a network of peer-to-peer payment channels. You pay off-chain directly to a peer, but you can also pay an intermediary which then pays the destination. If they don't forward the payment, it's not like 'held in custody', instead you get a route fail error and your node tries a different intermediary until it finds one which works. Worst case, the payment fails and you get your money back (in fact, it never left your wallet until destination is reached).