That's right actually, and besides, a reputable and trustworthy platform will not reject a user's kyc verification request without telling the reason why the documents the user submitted for the kyc verification is being rejected, any platform that reject a user's kyc request without stating the reason why the request is being rejected is either bugged, or the platform have some interior motives, which basically might be to frustrate the user into giving up his or her withdrawal request, but go ahead to gamble away the funds instead.
But again, like you rightly said, all this can be avoided by simply choosing to play on a reputable casino where paying their customers winning isnt a problem to them regardless of the amount of money involved.
This is actually a tactic that some casinos use in order to try to avoid paying to money they owe to their clients, they know very well that the documents that were submitted to them are legitimate, but they use dilatory tactics hoping that at some point the gambler will get desperate and gamble their money away.
And the tactic seems to be effective, as it is relatively common to read the complaints of casinos customers that had this happen to them and lost all the money they had won at the time.
I don't know of any casinos like this, but the way it might be done is quite logical by canceling the KYC of the user who is going to make a withdrawal, but it might also happen that the country of the user is prohibited in that casino which can cancel the acceptance of KYC, or it could be unclear or whatever even without providing information.
But it would be a pity if there are casinos that do such fraudulent tricks to their users, it is very embarrassing and I am today becoming more careful in using new gambling sites, this makes a little scared, because after all the data provided to the casino is personal data and it is very important to protect.