Legal Question in Criminal Law in California

It's legal to keep or carry large amounts of cash. But if there is other reason to suspect you of crimes that would lead to having lots of cash, having it will add to those suspicions. People who really are drug dealers or money launderers often have innocent sources of cash too. (They also often worry about being arrested and having the fact they possessed large amounts of cash used against them.) Being able to show you received a lot of cash from an innocent source will help, but it won't prove that any particular cash is from that source.

One advantage of using the banking system is that, unlike cash, it creates a paper trail. But a paper trail is often the last thing someone who avoids the banking system and worries about being framed would want.

No, it is not illegal, but if law Enforcement finds it on you, they will immediately suspect you of some criminal activity and seize it as 'evidence'. It happens all the time, and seldom turns out well for the person trying to recover the money, who will spend significant legal fees trying to do so.

Supplement to my answer to your first post:

The crime you would be suspected of in trying to go 'off grid' would be 'failure to pay IRS the taxes due on the proceeds'. The escrow company involved would not likely pay you in cash anyway.