Well, fiat money is considered to be fungible, yet it has the same concept of taint. Entities like banks or some companies can freeze and reject transactions if they deemed as high risk by their algorithms, for example coming from a blacklisted country. Or when a person with no financial history suddenly deposits a huge sum in cash.

This is the reality of digitalization. It allows much easier control on the monetary flows than physical money, and governments don't want something digital yet anonymous like Monero to be widespread, so they will never allow it to be accepted by legally operating businesses.