great

so satoshis are fungible

yes we agree on that.

UTXOs arent.

anyone observing the ledger can differentiate between same-value UTXOs

individuals, governments, anyone.

therefore they are not fungible.

its really that simple.

and the market DOESN'T treat them the same. we have plenty of examples of UTXOs being treated differently.

so if your litmus test for fungibility is market acceptable, it still fails.

your entire argument (without the obnoxious AI bullshit and grandstanding ) is simply "UTXOs are treated equally by enough market participants to call them fungible"

but ANY observer can still differentiate between them.

so they're not.