If relays deny requests for public events unless they have received an AUTH response, then it becomes a big problem. I won't be able to read a users public events from their outbox relays.

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Oh, you mean, if all of their relays are AUTH relays, but not read-limited? Yes, that could be a problem.

What do you mean by read-limited?

When they use auth, but anyone can read the notes, who isn't blacklisted.