The problem is linking that output to a distinct deposit that was made using their service. Chipmixer also supplies various tools to change the outputs that would be released adding a layer of obfuscation. This does help with privacy but is in no way 100% anon.
Pretty much nothing online is ever 100% anonymous, but (as far as I am aware) there has never been a successful method of linking ChipMixer deposits and withdrawals without the user messing up and revealing information externally, i.e. using mixed and unmixed coins together in the same transaction. Splitting deposits in to different chip sizes for withdrawal certainly boosts your privacy as you have said, but so too does withdrawing different chips at different times, combining older deposits with newer ones, and ChipMixer's unique structure which lets you withdraw chips which were funded long before your deposit transaction.
It seems that mixing services are more centered around keeping your balance and transactions anonymous. Yet some use it as a way to launder money.
Sure. There is no denying that some people use mixers for illicit purposes.* But a minority of people also use the internet for illicit purposes. Or encryption. Or Tor. Or cash. Or cars. Or pretty much any piece of technology ever developed. That does not mean that any of these things are morally wrong or should be banned.
*These people are very much in the minority, with studies suggesting less than 8% of all mixer traffic is linked to illicit activities. The majority of people using mixers just want to protect their privacy.
