Its all about control. Any government would love to have absolute control over its citizens. A controlled citizenry is every government dream. While the government, having little or no control over its citizens use and adoption of bitcoin gets them scared.
They want something they could control and regulate. Bitcoin isnt having any of that and that fact makes them jittery. So they go all out to spread propaganda and false claims to get people to fear and avoid bitcoin. But as bitcoin adoption gradually increases, these propaganda and untruths are steadily being debunked.
It is very true as you said, the reason the government is afraid of bitcoin is because of control issues, because bitcoin is decentralized and bitcoin cannot be managed by third parties, so of course the government is very afraid of this, because the government's goal is to definitely want everything to be able to set under their control, the government also does not want to lose the tax revenue of its citizens.