Fungibility must be perfectly binary because it's an intrinsic property of the currency. And it's essential that it be treated as such because there are huge implications to whether or not a currency has that property.
A million dollars of stolen cash is worth strictly less than a million dollars only because those bills cannot be exchanged for another million dollars. It does not mean that the dollars those bills represent is worth strictly less than a million dollars.
Think about it this way. To launder your million bucks, you pay someone $10k. Does that mean the million is worth less? No- because the $10k you paid someone to launder it is still worth $10k! It's just not yours!
A million dollars of stolen cash is worth strictly less than a million dollars only because those bills cannot be exchanged for another million dollars. It does not mean that the dollars those bills represent is worth strictly less than a million dollars.
Think about it this way. To launder your million bucks, you pay someone $10k. Does that mean the million is worth less? No- because the $10k you paid someone to launder it is still worth $10k! It's just not yours!