Fungability as a term goes back hundreds of years.

I get that specialized communities use specialized jargon, but it seems like it would be less confusing to use the word "tracable" here.

Fungibility accurately describes the main problem here, right now some bitcoins are worth significantly less than others because they’re tied to hacks and you can’t send them to any normal exchange without immediately getting your account frozen.

You will have to spend more than 1 “dirty” bitcoin to get 1 “clean” bitcoin. Almost nobody will accept the dirty bitcoin, whereas basically everyone will accept a bank note no matter the history of said bank note (cops might show up at your door later, yeah).

But sure, eliminating traceability inherently solves this issue too.