the truth is that the two extremes you listed can be titrated.
if you use nullifiers you can trade some privacy for some security. basically you convert your true identity into a private token which you can use to authenticate aspects of yourself, the price being that the token can be tracked with some effort across services. better than just using your identity at least. if a token/nullifier is abused it can be revoked and then you have to jump through a bunch of hoops to get another.
the truth is that the two extremes you listed can be titrated.
if you use nullifiers you can trade some privacy for some security. basically you convert your true identity into a private token which you can use to authenticate aspects of yourself, the price being that the token can be tracked with some effort across services. better than just using your identity at least. if a token/nullifier is abused it can be revoked and then you have to jump through a bunch of hoops to get another.
there are some other trade offs that can be made.