That is the thing.

From my reading of the rules (and I could well be wrong) - you could be liable even if you never convert out of crypto because you are engaging in trading activity.

The problem is that it is not entirely clear and the tax authorities seem to be resisting being explicit on the matter - see that wiki page.

Personally that is the only form of trading I have done and I was under the impression that I should be OK and I believe a lot of other people have been under that impression too.

Seems IRS has an incentive to leave the rules vague and decide later what types of audits to pursue.

Exactly. One can't help but think it is deliberate so that they can keep their options open. You can't really argue with them (unless you are a big bank).