I assume no since the wallet is anonymous, they cant really report it.
Nothing with Coinbase's name on it is anonymous. The Coinbase wallet will absolutely be sharing all kinds of data with Coinbase, which will most likely include any trades or conversions you do from inside the wallet.
2) is this considered a tax event by irs? if i convert say from usdc to dai, it's just a 1:1 conversion, do i have to report it to irs
Yes. See question 15 here:
If you exchange virtual currency held as a capital asset for other property, including for goods or for another virtual currency, you will recognize a capital gain or loss.
Your cost basis will be the total amount in USD you paid for the coins you are selling/disposing, versus the total amount in USD the coins you are receiving are valued at.