[super256]

CEX are important because they provide liquidity.

Most people who offer XMR/FIAT exchanges (like localmonero.co) are trading on exchanges like Binance in the background, and sell it to you (privacy focused, anonymous user) with an additional commission.

Such traders aren't concerned about a "government identity being tied to an exchange wallet" and whatnot. They just want to make money, and liquidity is important for a currency.