Binance says you could lose your deposited MWEB Litecoins… When does Privacy become harmful for Blockchain transactions?

Aside Scalability and transaction speed, transaction privacy is another feature which blockchain networks like Ethereum, Zetrix, BNBchain network and several of them project.

In respect to transaction privacy, Litecoin developers recently activated an optional privacy-preserving protocol on the coin which allows the Litecoin network to conceal transactional data. But it's rather surprising that this development has been met with so much unacceptance by crypto exchanges.

Upbit and Bithumb exchanges in South Korea were the first to delist Litecoin from their platforms saying that MimbleWimble Extension Blocks would prevent the exchange from tracking crypto transfers.

Binance exchange has also announced that it won't support litecoin transactions that make use of MimbleWimble Extension Blocks (MWEB), and MWEB litecoin deposits into their Binance accounts would result in loss of funds.

Transaction privacy is definitely one of those distinguishing features for Blockchain transactions, but when exactly does privacy get to the extreme?