I would say it is custodial Bitcoin but self custody of LBTC. Federated tokens and ecash where you actually hold and control the keys but the token is to be redeemed for trusted BTC makes for an odd categorization, imo.

In other words, I think it’s self custody of a credit token. Much like a banknote. Hard to decide if that makes it clearer or more complicated. But it definitely isn’t self custody BTC, you must have full power to withdraw without any other parties for that to be the case. Definitely doesn’t meet that requirement.