How will stake react if users are playing from a restricted area and submit ID from that restricted region?
Will they get banned or restricted immediately?
Provably it will end up your account will be suspended.
But care to read their TOS here.
https://stake.com/policies/terms It has clear explanation on what will happen if you violate their rules and doing those things what you said is against your TOS so if people know that they are from banned or restriction countries they should not gamble or stake or any other casino.
Read this.
14.4 The attempt to manipulate your real location through the use of VPN, proxy, or similar services or through the provision of incorrect or misleading information about your place of residence, with the intent to circumvent geo-blocking or jurisdiction restrictions, constitutes a breach of Clause 5 of this Terms of Service
Also this.
5.2 In case of a breach of any of the representations, warrants or covenants mentioned in 5.1, Stake reserves the right to close or suspend Your Stake account at its own discretion and void any bets to the extent applicable by law.