I don't see that as any different than Bitrefill.
Obviously Bitcoin, and Monero aren't as easily spendable in fiat land yet unfortunately.
The goal should be to make both as spendable as possible.
But even if we assume 100% become BTC only for crypto then monero would just use swapping services instead to spend.
I could spend Monero, and you get bitcoin, and you wouldn't know it unless you used an advanced AML system that tracks swapping services.
And let's assume if the global economy was 100% Bitcoinized then some malicious people would see others balances unless merchants used 3rd party custody, or advanced obfuscation methods like coinjoins, payjoins, or whirlpools, etc. But those who didn't would be attacked if they had large BTC amounts.
This would become common enough where people would begin to save in privacy assets instead to protect themselves.
