I use a number of custodial services. For example, my SN wallet is custodial.

If the amount in it exceeded $10 or whatever, I might transfer most of that balance to something that isn't as easily compromised (e.g., get my twitter account, you got my SN balance ... by simply logging in to SN using it and withdrawing).

I use BlueWallet as my LN wallet. I might have a balance up to $50 or $100 there, before I might transfer to something that isn't as risky to carry around.

But for stacking larger amounts, there's no way I'm letting Kraken, or whomever, sit on those. Do I trust Kraken? More than I do most other exchanges, for example, but an exchange is not the right place for holding my bitcoin.

ColdCard, or some other hardware wallet (with secure seed storage) is the right method -- at least for any amounts I might wish to secure. And for larger amounts, there are vault methods with multisig and such.

There's literally no good reason to leave funds on an exchange beyond what's going to be used for trading in the immediate term (e.g., number of hours, or maybe a few days).

And there's sooooo much history proving to us that leaving bitcoin with a custodian, or lending it out, or leveraging it, ... are great ways to reduce your bitcoin holdings down to near zero.