Am I correct in that the definition of "freezing" here is private company refuses to do business with marked cash?

And that a private company who is hacked (and was previously the custodian of a customer's tokens) makes it more difficult to retrieve same through its machinery?

Per your link, "Still, by Monday, Elliptic said that hackers had already flipped millions of stolen tokens for $7.5 million in ethereum (ETH) on decentralized exchanges (DEX) Kyber Network and Uniswap."

So the "problem" is that companies are making decisions for themselves (admittedly, approaching the way Google and Apple can make decisions "for themselves"), and that people who were given control of assets are controlling them.

Decentralization seems fine from a protocol perspective, these are just effects of human behavior.