This thread is another case of comparing apple with orange. Bitcoin is cryptocurrency, while Tornado Cash is decentralized privacy tool in certain cryptocurrency network (such as ETH).
1. Likely to get banned, for real.
Looking at how government treatment towards Monero, it's possible.
2. Devs will be forced to break the anonymous part.
Such change is likely to be rejected by the community. Looking at Monero community as example, i don't think them would ever accept change that remove privacy or make privacy optional.
4. A great tool for hiding frauds transactions it is.
Some banks also used for money laundering, in bigger scale.