It's a massive money laundering red flag, it's not at all surprising that Stripe doesn't want to deal with you.
Cash transactions above a specific dollar value literally generate reports to the government for investigation.
So, I think, yes, cash transactions tend to generate suspicion among anti-money laundering efforts.
The reporting you are referring to only relates to bank transactions. In the US, When a business deposits their cash receipts, the bank generates a report. There is no obligation on the business (e.g.a car dealership that sells a car for $100k in cash has no incremental reporting burden)
More importantly - because x can be used in the commission of y crime, but the vast majority of the use of x is in perfectly normal/legal use, one should not cast suspicion on the use of x or reverse the burden of proof on for using x.