I've been reading through the Doc's site in an attempt to kind of understand better. So far it seems like a custodial trade-off. It uses E-cash, so think cashu, for user privacy. They also urge that fetiments be run by what they are calling a 2nd party custodian. Friends, family, somebody trusted in your community that you could essentially go break their knees if they rug you.

To use their words, it's a community custody solution. The smaller the community, the higher the trust, but the lower the anonymity set. No matter what size of Fedimint you join though, you are essentially trusting these Guardians not to collude to rug you, which is a possibility.