The only questions that are worth answering in the privacy discussion: does the proposed BIP increase the network decentralization? And does the BIP increase network security? These are the only two things that matter when talking about any changes to L1 development.
I disagree. Over the past years, we have seen people in the bitcoin sphere become more and mroe confortable with custodians, thirdparties and "regulatory clarity and compliance". That is besides the possible privacy improvements on the base layer. The complacency and degeneracy of cypherpunk values is well worth discussing.