AML/KYC is just the financial arm of global mass surveillance. They can just trace your withdrawals from an exchange. If you're not mining crypto, you're done.
Well you can always exchange it peer to peer, without a third-party (exchange/payment processor/etc.) as it is initially meant to be used, but it's true that mining rewards are generally the most anonymous way to acquire it.
> Who's going to show up at some untrustworthy place with fat stacks of cash in order to trade crypto?
Lots of people, actually. Its more common than you would think!
The hardest part is matchmaking and (optionally) escrow.
LocalBitcoin originally did this for IRL but then stopped as they were slapped by a regulator. They were taking a cut from the escrow and acting as a custodial wallet, which made it easy to spank them.
They are now kaput.
There are other, less stupid, platforms that replace them.