The paper, "Demystifying the Privacy-Utility Trade-off in LLM Interactions," was announced as a new arXiv submission. The authors say current privacy-preserving methods use context-agnostic static rules, causing severe utility degradation. They identify three mechanisms governing the trade-off: context-dependent utility, strategic adaptation, and combinatorial interplay.

Guided by those mechanisms, the authors introduce an intent-driven local protection framework. It distills a lightweight model, Veilmind-4B, to drive an extraction-sanitization-restoration pipeline. The authors say the approach reaches a low-leakage privacy point while preserving substantially higher response utility than existing privacy-oriented baselines.