I agree that "tainted" Bitcoin is nonsense.

Since decentralized swaps, mixers etc. are possible for Bitcoin, it is technically impossible to filter out "tainted" coins.

If I use a decentralized atomic swap to trade my untraceable Monero for somebody's "tainted" Bitcoin, then how would the simple act of owning that Bitcoin make it legal for some third party to harass me? Even if the last owner did something illegal with that Bitcoin, that connection is severed the moment I become the new owner.

Any business that supports withholding a users funds over such unlawful reasoning such as: 'the user supposedly owns tainted coins' is a criminal business and should be avoided like the plague.