For a new transaction, usually all UTXOs will be bundled and sent to a different address which you have selected to transfer Bitcoin to.
If you use a non custodial wallet, with Coin Control feature, you can choose UTXOs for your transaction and can use change addresses too.
Coin control is a good feature and already part of my article:
Second, you can use a feature, called "coin control", which basically is managing your UTXOs. Coin control will allow you, to only spend specific UTXOs in a new transaction, where your can only select a single or a few UTXOs, to prevent your transactions from becoming too costly because more UTXOs included in a new transaction means higher transaction fees.
In coin control, you can select manually, which UTXOs will be spent.
UTXO management (coin control) is available in quality wallets like BitcoinCore, Sparrow Wallet or Electrum.
UTXO management is also effective against “dust attacks”.
Here is a thread about dust attacks and how to avoid it.
Dust attacks are also already covered in my article:
About dust attacks, expensive fees and how UTXOs will help us
Because usually all UTXOs from a single address will be bundled by default for many wallets, malicious actors come into play, using so called “dust attacks”.
Dust attacks are occurring, when an often malicious attacker is sending small transactions (UTXOs) to one of our addresses. In detail, dust attacks are really small transactions being sent to one of our wallets.
Especially for publicly known wallets it’s a big issue and that’s why we should always try to avoid giving our address to anyone. It’s better to keep it always as private as possible.
Now, we will face several UTXOs on our address and when sending a new transaction, all UTXOs will be sent as a bundle to another address, making our transaction very expensive because of so many UTXOs.
So, UTXOs are helping us to avoid compromising our privacy and also to avoid sending too expensive transactions by avoiding a high transaction fee.
Here, UTXO management is of importance to avoid merging our transactions.
UTXO management for saving transaction fees and avoiding dust attacks
After a dust attack has happened (where an attacker has sent many very small Satoshi transaction inputs to your address), UTXO management will help us to avoid merging such dust attack UTXO’s into our regular transactions.
Because each UTXO will cause an increase in transaction fees and dust attacks are usually planned by attackers to require more transaction fees compared to their intrinsic value, especially when transaction fees are high.
UTXO management will help us to select only UTXOs we really want to sent forward to a new address.
Of course, a dust attack can also try compromise our privacy by sending us transactions of tainted coins.
Also, for regular transactions, UTXO management will help us to save transaction fees for cases, where we have accumulated many inputs on our address but during times of high transaction fees, we just want to send out a single (or few) UTXO to save transaction fees.