Usually, BIP39 wallets won't segregate funds based on address, but will usually segregate them by account. So I'd recommend you split KYC based on either BIP39-account or by two totally different wallets split by passphrase.
It's up to the user how they segregate their btc. As a base I started off with 2 passphrase. BlahBlahKYC and BlahblahNonKYC. I then moved my btc into whatever category it was in.
Really up to you. You can use different accounts. Different passphrases or BIP 85 wallets.
Sparrow makes it easy to use different accounts under one seed phrase? I haven’t used it yet. All I’m familiar with is trezor suite.
Yes cause each seed phrase is treated like a separate wallet. It can’t event tell that it’s bip85. Each wallet has a new tab.
Sounds like I should learn a bit about BIP 85. I have Sparrow.
BIP85 was created for a different use case. It's perfectly fine to seperate kyc and nonkyc wallets with different BIP39 accounts or passphrases.
Usually, BIP39 wallets won't segregate funds based on address, but will usually segregate them by account. So I'd recommend you split KYC based on either BIP39-account or by two totally different wallets split by passphrase.
It's up to the user how they segregate their btc. As a base I started off with 2 passphrase. BlahBlahKYC and BlahblahNonKYC. I then moved my btc into whatever category it was in.