This is the main concern for me. The more addresses that get sanctioned by govts, the more it puts pressure on the main value proposition of bitcoin.

We already have some loss of fungibility but it's mostly at the off-ramp level.

Would ofac adding every output from a whirlpool coinjoin to their list bring the matter to a head? It certainly would be a big mess. How far away from a coinjoin output could they argue is "connected"?