if KYC is needed, it should be requested as soon as people register. Asking for KYC only when people have funds stuck is a douchebag move, and any company that does this will lose me as a client.
That's how it's supposed to be but opposite is the case nowadays. It's typically best practice to request for KYC upfront because requesting KYC only when funds are stuck will definitely create a stressful and frustrating experience for the customer. It's actually a red flag if a company doesn't have a transparent and straight forward KYC policy and process. Unfortunately, most casinos are found of doing this unless you don't want to to play again. You have no choice other than to accept that controversial KYC policy where they use to say "KYC is not mandatory but they reserve the right to request for it when necessary". It's a big trap and indirectly telling you that KYC is very necessary in a cunning manner.
And yes, the casino will lose you as a client but the big question is are you willing to lose your winning for casinos? I think no, unless the amount is not reasonable and casino will not ask you to complete KYC for just a little amount. If your privacy really matter, one must learn to read and understand every of their terms before clicking on agree and continue.