It is scary I agree. If nothing else, at least they are letting you know in advance, so you can move on. I would never participate if KYC is needed, and certainly not if they are going to make the data public. With most of these ICOs, even if the KYC data are not public, who is to say they won't sell your data on the black market? So no thank you.
And what if you participated in an ICO that lasted for months and at the end of the day, you are told KYC is required what would you? would you abandon the tokens you have earned and move on? or will you do the KYC?