That's the misfortune of all this. A good majority of people can and will still keep all of their coins on some exchange. So considering the population who actually holds Bitcoin properly, by self-custody, is so low, news like this tends to get swept under the rug with relation to the larger population on the internet. Even if Crypto Twitter can be quite vociferous in their opposition to this.
Maybe that was the case 5+ years ago, but it seems to me that today there are many more coins in non-custodial wallets than are held by CEXs. Some estimates/analyses when I last read about it speak of around 1.8 - 2 million BTC being held in CEXs wallets, which considering the almost 20 million mined coins, is maybe a maximum of 10% that are being stored in such a bad way.
I don't know if the situation has changed with regard to spot ETFs which mostly use the custody services of CEXs, but it seems to me that all the coins they buy just move from CEX wallet A to CEX wallet B.