There is one model of the function of money that you don't address here (that maybe is closest to…

There is one model of the function of money that you don't address here (that maybe is closest to the financial model): money as a lubricant of exchange.

In this model, burning money decreases dollar-velocity.

I think this is the strongest model for claiming that burning money causes (a tiny bit of) harm, but it doesn't explain the experience of burning money or the taboos against it. After all, under this model, destroying a dollar is only slightly worse than hiding it (or saving it permanently outside a bank).

Furthermore, it does not explain the non-linear nature of the taboo: why is the thought of burning a dollar bill so much scarier than the thought of dropping four quarters into the ocean? Why is the thought of burning a twenty dollar bill so much more than twenty times scarier than the thought of burning a dollar bill? There are novelty machines here that will deface a penny in such a way that it becomes no longer legal tender, and in no way do those machines receive anything like one one-hundredth the taboo of burning a dollar bill!