Hypothetical situation:

I deposit Bitcoin to borrow fiat against. I can’t see my deposited Bitcoin because it is mixed and sent to the relevant institution loaning me the fiat.

I then use that fiat to buy more Bitcoin.

The lending institution sell me more Bitcoin.

The Bitcoin I buy from them, I self custody.

When I inspect the Bitcoin I’ve bought, it turns out to be my original Bitcoin deposited in the institution in the first place.