I used a centralized exchange and was KYC'ed there without knowing these risks. This article explains why you should avoid centralized exchanges and banks. I understand that we have very limited options out there. But if you care about your privacy, you have to be careful.
Indeed your post has captured the whole essence of starting this topic, because though I'm still new in bitcoin, I'd always wondered if exchanges were in the original plan of bitcoin. I know that bitcoin was created as a decentralized digital currency that guarantees privacy between two participants, so the emergence of exchanges in bitcoin transactions brings interference in the privacy. I've gone through the link that you shared and it concurs with your post which I totally agree with everything said, that besides making money off transactions, that they can also compromise their customers personal information, as you have mentioned.
Although the exchanges provide essential services in transactions because of the convenience they bring as being middleman, but we also need to have it in mind that our supposed privacy in bitcoin is not private with exchange involvements.