So far so good with Coinbase. But they will temporarily stop accepting deposit on Aug 1 and I am not sure when it will resume. I just wonder where the rejected payout goes.
I have set up Electrum on my machine in case. But I do prefer Coinbase since it's only a few blocks from my office

Hi Kano, I wonder if the payout from Kanopool to Coinbase is rejected, what will happen to the payout? Thanks.
If Coinbase rejects your payout, then they are not accepting Bitcoin.
So you have a rather major issue with them then.
If you think they might stop accepting Bitcoin then don't use them.
Technically if kanopool disburses a payout to their wallet address, they cannot prevent from receiving ("refuse") it.
I assume they would either resend it back to kanopool address or simply not crediting the equal value to your coinbase account.
In the first scenario, you may seek for help from kano but it could be messy;
In the second, you would have to deal with coinbase, which is a few blocks away from your office
