I am using localbitcoin site for a long time and they have not banned me though I have seen a lot of user who have been banned. And almost all the the banned happened as they are scammer. They scam by various ways, as fraud email, outside contact and then scam, reverse paypal, skrill, netteler etc. For your case failing kyc it is very important to them too. If you go to bank and want to open a bank account with your id card then will they allow? If not then why localbitcoin will allow you to operate an account for such a way.