They could still burn tokens as one tries to use their service. Imagine you receive an ln payment selling ice cream but it doesn't get credited in your wallet cause lightspark thinks the sender was a terrorist. Imagine you buy 🍨 with such a wallet and your funds are gone but the recipient doesn't get them. Your wallet now accuses you of terror financing without telling you and you somehow have trouble boarding your plane home.

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custody require always trust in custodians, cashu as protocol has in place all the instruments to make the custodians-market smooth and as safe as it can be (all bad stuffs would still happen if you dont custody yourself, but users will have more choices and power)