To buy Bitcoin most people use exchanges which you must KYC on.
Yes of course and I will tell you why, the world is advancing in both technology and crime and transacting some things between individuals alone can see an individual robbed and deprived of his coins and his money, so it is better and more secured for most people to sell and buy on reputable exchanges which offer them security against assets loss and victimization. upon acquisition, you are advised to move the coins to a decentralized wallet because not your keys equals not your coin
There are also many other ways of acquiring bitcoin without patronizing exchanges like bitcoin paid jobs online, offering goods and services with renumeration in bitcoin, offline peer to peer ( sometimes, I buy my coins from friends who are in need of funds, and are sent directly to my opensource wallets).
To store Bitcoin most people use wallets that require the use of 3rd party nodes for transactions. This includes Hardware wallets.
Open-source wallets still hands back the power to you as there is no restriction on the pattern of funds acquisition and management. it is strongly advised to use decentralized wallets for your freedom and possible privacy.
Most people use Bitcoin like an investment not an electronic cash system. Banks are buying up large quantities of Bitcoin to hold for customers buying their ETFs.
That is one of its underlying features, Investment opportunity and people are benefitting massively from it, so it's a good one.
Though I might be wrong on this but I think the main or the core reason of creating bitcoin was to use it to trade p2p which is to buy goods and services online but that part or function of bitcoin creation is not working perfectly yet and I don't know if it will work in the nearest future.
I really think you're wrong, the core features of bitcoin creation is decentralization of money system, privacy, anonymity and freedom from government interference and regulatory activities on public funds. P2P is a feature that supports the freedom from as you can transact with someone directly without the involvement of a third party. The part of purchasing goods and services online still works, I still get paid for services rendered in bitcoin at will, I think the fact that it is not rampant is due to the fact that most people have not adopted it as a means of payment, the more its adoption, the more that feature works more effectively.
I like to do that but no store in my area is accepting bitcoin in fact they don't even know the name. And those who use exchange to buy bitcoin because it is the fastest way to acquire bitcoin.
The store in your area is still possibly in an underdeveloped environment which has major dependence on fiat, another thing to consider is the quantity and cost of goods you are purchasing, also how much digitally exposed is that store owner. I believe that bitcoin would not replace fiat totally, but it can take care of larger, more meaningful transactions rather than peanut transactions that little units of fiat can handle.