For me it is clear cheating, because first - in such way they will cut the number of rewards, second - they will collect your data. If they are acting in such way, they easily can continue their cheating. Or for example - sell their database. Anyway i am trying to stay away from such bad players.
Some projects abuse the process and we cant do something about it. But legit projects just making sure that the rewards will be received properly by the users. Normally KYC is not supposedly impose but some hunters are busy with cheating the campaign, team feels the needs to do the process to avoid such giving rewards to those who are not really work hard for the promotion and only just taking advantage the real hunters.