The truth is that they started to die when they were forced to introduce KYC rules.
Since it was one of the reasons people traded there, they moved to another place
You can trade on Binance before without KYC, but Binance had no option than to make KYC mandatory. Yet, Binance remain as the exchange with the highest trading volume. Although, some people that are concerned about KYC left the exchange at the time. Jeremias Kangas founded Localbitcoins in mid 2012. 2022 crypto winter wasn't the first, that makes your post valid, but regardless of if what happened, it is still about the survival of the fittest, no necessarily about KYC as well if other things has been in place.