At least they don’t end up holding more BTC. That’s the upshot.
Discussion
I’m in favor of governments holding BTC. What’s the downside to that? I agree with the downside of incentivization of seizing off funds, for civil forfeiture and other BS demonstrate the government is happy to seize any kind of asset for any reason.
The downside is that everything the State has is stolen. Any BTC held by the State is stolen. I don’t support theft.