Realization isn’t restricted to “unambiguous outcome with zero question to the providence or final outcome” even in the existing tax code, and what does “final” even mean.

It’s mostly an administrative convenience that we work with sale as the archetypal realization event. And collateralized borrowing is a very good candidate for realization as it inherently involves valuation.

Regarding losses, yeah you could then realized losses which could be used to offset gains from other sources, rolled forward into future tax years and so forth. That’s all a pretty normal part of wealth and tax planning for people with ample and complicated finances. They hire people to handle this, don’t worry about them.