Let's imagine for a second that I owned a physical bricks-and-mortar business with a shopfront that took physical cash (USD banknotes), then mixed it up in a big laundry machine with banknotes from other customers, and then I give you back some other banknotes which are totally random (less a fee).

Let's also say I don't do any Know Your Customer checks (KYC).

Do you think that should be legal (like highways and SMS) or illegal (like money laundering)?

You can literally go through the rekt leaderboard [1] and count how many of the stories end with "and then the funds were routed to tornado cash, fin." It's not exactly a secret, and it doesn't require any specuation.

[1] https://rekt.news/leaderboard/

?

https://home.treasury.gov/news/press-releases/jy0916