Imagine this scenario:

1. User A holds a publicly visible wallet with 1000 bitcoins in it.

2. User B publicly gives User A 10 bitcoins.

3. User A now holds a publicly visible wallet with 1,010 bitcoins in it.

4. Over the course of a month, User A distributes all 1,010 bitcoins across a thousand new publicly visible wallets, in seemingly random amounts. These wallets are publicly visible, and the transactions are publicly visible.

5. Nobody knows who holds the keys to any of those wallets. Presumably, at least 10 bitcoins worth of money belonging to User B is held in some combination of those wallets, but figuring out which ones belong to User A vs User B suddenly becomes very complicated.

6. This becomes even more complicated if there are more than two users in the scenario. What if there are actually a thousand users that the money is being mixed between?

This is the premise of bitcoin mixer services. It is at least somewhat possible to "anonymize" and "launder" public bitcoin transactions on the public ledger via this method. This is especially true if someone uses multiple mixer services to launder the same money split across a bunch of wallets.

Or at least that's my understanding? I've never actually done it.

I know... every time I hear/read that it raises a red flag that maybe this person hasn't done much reading on the subject to begin with and just heard it through the luddite grapevine.

Because it's a currency that works like cash over the internet with no reversibility, it can be easily laundered via mixers, and has no ties to your real life identity unless you want it to.

It's not perfect but it's by far the best currency for illicit online transactions.

When you use a coin tumbler, the image invoked is that of laundering like clothes tumbling in a washer machine. How can willingly jumping into an optional laundering service not raise a red flag? Is it possible that another cryptocurrency like Monero will have privacy as a default that makes it so you don't look like Al Capone when you [maybe] want to just preserve some privacy?

Anonymity is about the only selling point for BTC transactions that I could ever see the appeal of from a buyer's perspective.

Most interesting aspect to me is the deflationary aspect. Savers in today's society get punished. If you don't want to buy lot's of stuff and instead want to achieve financial freedom, then Bitcoin can be a viable alternative.

Additionally I work abroad, once I realized how much is was going to cost me to send my salary back home using the traditional banking system, I quickly became a bitcoin enthusiast

"Savers in today's society get punished"

No. You can earn the same as inflation in a risk-free investment.

You can earn more by taking a small amount of risk.

Savers are not punished for anything.

? If you leave your money as USD in a bank account, you will not earn the same as inflation as interest. I consider this punishment.

A pure deflationary currency should exist to counterbalance inflationary fiat.

A deflationary currency seems pretty terrible for business operations or for any major purchases (car, house, etc.) though. If it's just an asset to hold on to that's less of a concern but the volatility of Bitcoin would make me nervous.

IDK I've gotten paid in bitcoin, and a variety of other alts before. Sometimes I moved into fiat, sometimes I saved it, if it can buy labor, it should be able to buy basically anything.

In fact I wish a portion of my actual salary was in Bitcoin, so I didn't have to pay exchange fees every month lol

If you're considering a long horizon, then volatility shouldn't bother you too much.