3. One of the disadvantages of utxo consolidation is that it reveal privacy so is it that people who do it don't care about privacy or there's a way around it.
It can affect your privacy, it doesn’t directly affect your privacy per se.
From the source of your learning it mentioned in quote "A poorly planned UTXO consolidation can undo your privacy efforts and reveal your total balance on the blockchain. " .
You should notice they included a
pooly plan which means a perfectly planned consolidation pose no risk of exposing privacy if that's your .concern. They aslo adde an inllustration which you can check out or let me help you with it :
Imagine you regularly buy Bitcoin and withdraw it to a new address each time. Over time, your wallet accumulates a few UTXOs that aren’t linked to each other, keeping your true balance private.
Now, suppose you also have a side hustle and take Bitcoin payments. Let’s say you run a YouTube channel where you post a Bitcoin address for donations, and some viewers have sent small amounts to that address. Each donation creates a separate UTXO, creating a single address with small amounts of BTC and a high number of UTXOs, which is not ideal for withdrawing in a high fee environment.
At some point, you may think about consolidating your UTXOs to save on transaction fees, especially after hearing about rising network fees. To do so, you wait for a low-fee period, then consolidate all your UTXOs into a single, large UTXO.
By consolidating all UTXOs at once, you inadvertently reveal your entire Bitcoin balance to the blockchain. Now, anyone who sent you a donation, or anyone interested in your YouTube channel’s address, can easily see your combined balance. This is an irreversible action and may lead to future privacy and security concerns once your holdings are publicly known.
This is self explanatory on it own, i don't think there's anything to add to it but if you need further clearance on anything there you can point it out.