There's also a difference between touching the fiat system and needing to touch it. If a supplier exists who deals in bitcoin, that could be part of the bitcoin circular economy even if they also do business with fiat customers.
If fiat has to be used, then it's not a BCE, but circularity is also not an all-or-nothing category. An economy is more circular the more things can be done with bitcoin.
There's also a difference between touching the fiat system and needing to touch it. If a supplier exists who deals in bitcoin, that could be part of the bitcoin circular economy even if they also do business with fiat customers.
If fiat has to be used, then it's not a BCE, but circularity is also not an all-or-nothing category. An economy is more circular the more things can be done with bitcoin.