The question is, how will we be able to use our bitcoin if most of the people suddenly decide to use bitcoin in a government-approved manner.
I always thought this scenario was an "if", and that more people would be disgusted by this behavior and do something about it. Given how little everyone seems to care, I worry this scenario is now a "when".
I've never had a problem yet with having bitcoin refused or seized, but I also don't use any centralized exchanges. However, to say I am not concerned about this kind of privacy invading behavior spreading to merchants and affecting me in the future would be a lie, especially with the news of mining pools now excluding so called "blacklisted" transactions. The day I can't spend my bitcoin without completing KYC is the day I trade all my bitcoin to monero, I'm afraid.