There is no one USDT; there exist different USDT tokens on multiple chains, and the "freezing" has to be subject to the rules of the chain.

USDt on ETH for instance is relatively easily frozen, since it's all one contract.

My understanding is, that USDt on Liquid on the other hand, can't be frozen because it has confidential assets and it is not visible to even the federation members whether a certain address holds L-USDt, or some other Liquid asset.

Even if it could still be somehow found out which addresses holds L-USDt (e.g. data leak, ChainAnal etc) you'd need 11-of-15 functionaries to phsically upgrade their Nodes/HSMs with some sort of blacklist.