I'm from the Netherlands so I'm not allowed to use this service. Does this also apply to investing?
According to the new ToS, yes it does:
Continued use of the service implies consent to the new terms of service. For this purpose, remaining invested in the bankroll is considered use of the service.
Does this mean I should withdraw all my funds? Is there any chance my account will be locked because I'm a Dutch resident?
It seems to me the chance is low, at least for now, quoting devans:
KYC check is only necessary if I have a specific reason to believe that someone is prohibited from using bustabit, e.g. if they themselves claim they are underage in chat. It's worth noting that due to the prevalence of VPNs, accessing bustabit from an IP address in a prohibited jurisdiction is not sufficient to trigger a KYC check.
If a user refuses or fails a KYC check we may restrict their account from further using the site, i.e. betting, investing and chatting, and demand that they withdraw their funds and refrain from using bustabit going forwards. Outside of extreme edge cases like being compelled to by a court order, bustabit will never prevent users from accessing their funds.
And again from the ToS:
The operator not insisting on one of his rights granted by these terms of service in one or more specific instances shall not preempt the operator from making use of this right in the future
They're a legal business with a gambling license and unfortunately there are certain requirements imposed on them if they want to keep the license. I think these requirements aren't new but they might not have previously been enforced by the licensing authority.