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Those downsides don't seem that bad to me. If something needed repair, they can bring a contractor on site, and certainly the Fed has cameras and police to monitor.

(In line with some other commenters, I'm more inclined to believe it's bills they've taken out of circulation than "almost finished" ones -- security features are built in throughout the process, not just an extra step at the end.)

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Cameras still need to be monitored which costs money. Plus sleight-of-hand and other tricks are a thing, so you'd probably still need to background-check any contractors and maintain a strict chain of custody over access to the cube and then recount and re-check to make sure none of the currency has been substituted by lookalike fakes. Police still costs money.

If there is no reasonable way for the public to notice, why not make everyone's life easier by using fake money? That would be easier and cheaper.

Leaks can be dealt with by the legal system (pay people decently and make them sign an NDA in exchange not to disclose the bills are fake) which is much easier than actually keeping track of 1M of currency.

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