Yes, and all those advantages only apply when you are using Bitcoin in a self-custodial manner and transacting without permission (BLACK MARKETS by definition)

If a custodian has my Bitcoin and is issuing me Bitcoin IOUs they can still inflate supply for those users (fractional reserve).

If I'm making white market transactions I'm following any arbitrary rules the state wants for those transactions. That also applies to bitcoin transactions made on white markets. This is what I meant by saying Bitcoin has no advantage over fiat on white markets. It's slower, more expensive, much less accepted, and allows the general public to see your financial transactions (at least you have privacy from the general public with digital fiat)

"The government's primary source of power, fueling it's ability to be a surveillance state"
Ironically, Bitcoin also enables state surveillance because it is a transparent blockchain.