So this is really happening now? According to my prediction, all services that have government intervention will slowly become a centralized system.

For now, only a handful of law-friendly countries allow users to spend their crypto directly, the rest still rely on centralized exchanges (where KYC is a mandatory requirement) as they need to exchange fiat instantly in order to spend their crypto. I don't think most of the binance users will really abandon it as far as the assumption that KYC requests are common for them.