-snip-
although I have not done anything even remotely suspicious?
KYC is primarily just to identify a user's location, especially since oftentimes VPN use is detected for users from restricted countries (even if they don't do anything "suspicious"). In the end, users fall into more complicated verification than usual when making withdrawals.
I found their terms clearly written:
5. KYC / AML
5.1DuckDice reserves the right, at any time, to ask for any KYC/AML documentation it deems necessary to determine the identity and location of a User. DuckDice reserves the right to restrict service and payment until identity is sufficiently determined.