I think that's 100% true and I think that's why there hasn't been much coming from core devs trying to shore it up. It has a narrow band where certain people can say "hey look, btc is no risk, its privacy is so bad lol" and have that literally be true. The govt would react very differently if it had the privacy guarantees of Monero.

Everyone knows (I think) that there are other ways to make privacy really good -- joins, mixes, defi trades on other chains -- but we need btc to not get both barrels in the face before it can survive it. Pretending like we're harmless surveilled citizens is part of that strategy.