How is that not the case with Monero on a theoretical exchange? Exchanging fiat for Bitcoin or Monero is a social contract only enforceable by the parties and trust assumptions therein. My whole point here is pointing out "Bitcoin UTXOs can be frozen" is just as true for Monero on an exchange with a similar payment structure -> Fiat in ->Monero out but until payment is completed, any coin can be rugged. So, I just find this argument the weakest against Bitcoin especially from Monero advocates.

If said exchange is willing to take Monero it would almost definitely take bitcoin post mix.