IMO, it depends to users.
Some users does not have any issue by passing KYC. In other hand some are so concern about their identity maybe they are inline in politics, showbiz, sports, and so on.
This thread is perfect for people that are looking for privacy and anonymity.
Centralized or decentralized, use exchanges with caution and beneficial.
Why do keep hearing
classified and
not for public use by the government often times without number, it means that information you are looking for is not for the public, same should be for everyone when it comes to privacy and how we make use of personal information. If wasn't for many times these companies that do ask for KYC are getting campaigned for misused of uses information and documents, there are times you will just enter Twitter and found out that a particular exchange kyc server was hack and thousands of people information has been spread over social media, if you are among the victims don't tell me that you wouldn't feel bad.
KYC have their own good side to some extent, can't dispute that but the abuse and how they handle kyc is alarming and that's why it's better never to be involve in it. Even despite the fact that the government is calling for antimoney laundering and know your customer, that hasn't stop scammers from I'm penetrating the space, we have many scammers more in the fiat system today and the numbers keep increasing.