Yep. It's sad, but I think you're probably right. At this point, too many people have been scared into believing that fungibility is a bad thing. Which is completely backwards, but it wouldn't be the first time that people have been coerced into abandoning their own long-term interests out of short-term fear. An eventual protocol change is likely the only realistic way to properly restore fungibility.

I agree, but (to be clear) my position is not that we should pretend it doesn't exist. My position is that we should be making "taint analysis" as unreliable as possible, by convincing people that being frightened into never mixing their coins is tantamount to them giving up on the concept of fungibility. What I think a lot of bitcoiners don't realize, is that by giving up on fungibility they're unwittingly opening the door to a slew of nightmarish infractions on their financial freedom. By the time they realize the extent of the damage, it will be too late to effectively fight back against (other than by altering Bitcoin itself).

Yeah, I've got some (long-term) plans to develop a few bitcoin-accepting services, and I can promise you that I won't be participating in any "mandated" checking/flagging of deposits. I'm a fungibility nut, so I simply don't care [1] where funds originate from, I'll accept them without bias and likely mix them on withdrawal, too.

Yup. Long live Tor, long live onion services and long live anonymous clearnet web hosting. As long as those remain viable, I'll thumb my nose at the regulators.

[1] When I say I don't care, I don't mean morally, I mean practically (i.e. I don't believe that any organization with the authority to issue a list of "bad" UTXOs wouldn't end up abusing that same power).