Custodial privacy means trusting a mint operator and that inherently reduces the permissionless nature of Bitcoin. The concern about undermining node operators is valid since widespread reliance on custodial tools can lead to atrophy in the peer to peer network. However it is also worth acknowledging that not everyone is in a position to run their own full node or transact directly on chain. Privacy preserving custodial solutions can serve as an on ramp for users who later move toward greater sovereignty..