1. The prohibited list is not for people that are not respecting the NAP, it's for people's UTXOs that governments put on a list for their reasons. You will still be mixing with actual criminals, just not with the one's that messed with the owners of the regulatory list.
This list could include YOUR UTXOs one day, for any arbitrary reason.
  1. Ok. But a privacy tool giving any legitimacy to BS chainanalysis heuristics is asinine behavior.
  2. If you start the coinjoin process and the service is denied to you, this is where the biggest problem lies. This person is now in known possession of "illegal UTXOs" in some jurisdiction, and potentially could be tracked since the coordinator is being open sourced, but you cannot attest for what the compromised (IMO) coordinator is running on their end, as well as their chain analysis partner(s). While you might trust your local government or jurisdiction, there are several governments and their jurisdictions where funds you might have received will be deemed illegal. Every bitcoin will/should be tainted at some point, depending on the jurisdiction. So entering your service voluntarily into this mess is a very bad sign IMO. Surely should be "bad for business"