Reminded by someone of the Stirlingov case, here's some high level thoughts to bear in mind:
1. Bitcoin is intrinsically fungible.
2. Bitcoin's fungibility in practice is really bad.
3. Because of 1, "chain forensics" don't give you a perfect view of a user's activity. The idea of prosecuting someone based mostly on chain surveillance, and not other evidence is, at best, *astoundingly* unrealistic and dubious.
4. Because of 2, chain surveillance can provide very useful clues to an attacker (including law enforcement, but thieves etc. etc. too), so for the ordinary user, there is some benefit in using privacy enhancing technology, but don't kid yourself, it will never be perfect.
For a better privacy model, focus more on off-chain, use the chain as your security anchor, not your everyday wallet. And there are still no perfect answers.