If the UTXOs have already been spent, the system would not allow a reversal but would instead focus on recovery or tracing the subsequent transactions, depending on the circumstances.
you're confusing. i don't understand the policy. now it seems like you're saying if the UTXOs were already spent you wouldn't be allowed to reverse them. But previously, you indicated you would try and reverse UTXOs that got spent through mixers. Which is it?
5. Protection of Innocent Parties: The proposal includes mechanisms to safeguard non-involved parties, primarily through selective freezing of transactions identified with high confidence as linked to the theft. This would be managed through a judicious review process by the CVNs, who would be required to assess not only the evidence of theft but also the potential impact on third parties.
if something like this passes and gets into bitcoin it's about the worst thing that could ever happen and we need a new bitcoin ASAP.