Bybit despite how many exchanges been hacked before, they still were hacked like they didn't hardened their security for this type of attack. Whether the reputation of mixers going to stay bad or not, I think I will still be rooting for them to be successful in providing services.

And if they are going to be forced to decline services to Larazus group, they will also lose the reputation. So they are really in a bad spot in this kind of situation.
But I also wouldn't trust blockchain that will freeze the stolen funds because that would prove that ETH blockchain is centralized no different to the middleman we currently have like the banks.