This guy here, he gets it.

Not at all! That's the spirit of crypto! It can't (easily) be stopped, or regulated. I want that same attitude about fungibility. Instead of refusing to transact with shady businesses, simply make it impossible!

Why is that such a bad thing?

Do you think that's a good thing for Bitcoin? Is that what you want it to become? A collectible?

I think it has absolutely no incidence on Bitcoin. This is purely a subjective valuation on the part of the buyer.

I understand the technical difference between inputs and addresses but from a transactional standpoint it doesn't matter, because blockchain analysis services still ultimately determine your money's worth.

Of course it couldn't since Bitcoin being what it is, it allows its users to make complete abstraction of obsolete fiat regulations.

If you agree to this then you also need to admit that this is also true of aforementioned blacklisting and other "taint" practices. The entirety of the efforts being put into "mapping" the blockchain and listing addresses today are made by fiat parasites. I would dare say ONLY third-parties enforce such regulations and invest any money into them.

As such, when involved in purely peer-to-peer transactions Bitcoin users will scarcely, if ever, encounter this type of discrimination. The reason, again, is that it isn't economically sustainable, or yet even affordable. Be sure that what I'm suggesting is that the informal economy will crowd out and ruin any such conventions.

Participants in a p2p transaction either decide to oblige with the market's price or make a subjective offer according to arbitrary valuations. Consider that these participants are in competition with the market and as such the other side can themselves prefer to accomodate the other party or find the next best offer. With regards to Bitcoin the market is global.

some shops refuse to accept bank notes over $20
some shops refuse to accept payment in penny coins

some shops refuse to accept any cash at all and only accept cards
some shops refuse to accept cards and only accept cash

some shops refuse to take cheques.. some shops prefer cheques..

there is always extra fee's or costs depending on irrational reasons. there are even people paying hundreds of dollars just for a specific dollar coin..

theres people that have weird reason to pay more for a bank note that has a mystical serial number, that can bring luck.

the short story is.. soo what..
the funny part about buying freshly mined coins for a premium is the same as buying a new car..
.. as soon as it transfers ownership to you, its no longer new and fresh and automatically loses value straight away. meaning that there is no financial
incentive to do it. and is just a preference thing.. it does not mean other coins are not fungible.. its just a trend.. and not something that will affect the whole economy

.. afterall more second hand cars are bought compared to new cars per year

And to expand on your point, I think. In some parts of the world older generation of US $100 bills are considered less valuable than the latest, newest US $100 bills.

Fungibility isint a problem in the first place. Its not because a dead man said it need to be fungible than the principle still hold true. I very much doubt he could foresee hundreds of years in the future that money would become digital and ethereal.

Now we're in the era of Security.