While I am sure they go to great lengths to secure this money (!), we'd have to concede there is a non-zero chance they could lose some or all of this Bitcoin to theft or simply losing it.
And then what?
Coinbase offers this vague promise on their website that they are
"partially insured", but does anybody know what that actually means? If they are hacked and the addresses get destroyed or stolen (we'd never know which), then... where would that leave Coinbase depositors?
There's absolutely no 100% exchange to say it's 100% trusted because there're really ways which could lead to the lost of funds.
Coinbase is being sincere in letting you know that custodial risks can erupt where investors could lost their funds if paraventurely the exchange encounters bankruptcy also, if we must understand the high tendencies of scammers intelligences and tools used to crack privacies, of course despites how strong the security measures of the Coinbase maybe, it can be compromised if a right and advanced malicious hacking tools attacks it.
So believe it that anything is possible to happen with your funds at any exchange at all and then you personally could be more cautious with your security keys.