The truth is that they started to die when they were forced to introduce KYC rules.
This. LBC was a shadow of its former self. Anyone who actually cared about privacy or security left LBC years ago. I know I did. They were little more than a CEX using "P2P" as a buzzword for advertising reasons.
You can trade on Binance before without KYC, but Binance had no option than to make KYC mandatory.
This is different. If you want to use a CEX to trade fiat, then you must complete KYC. If you want to use a DEX to trade fiat, then there is absolutely no reason to choose one which mandates KYC.
It appears that peer-to-peer trading opportunities are decreasing. It constitutes a risk to us if a well-known P2P exchange closes.
I don't have any concerns about LBC closing. It was peer to peer in name only, and completely centralized in practice. If even a tiny proportion of its remaining users transaction to a real peer to peer platform like Bisq or AgoraDesk (like many did when they first introduced KYC years ago), then that will be a net positive for the peer to peer marketplace.