I agree with you and personally I don't really get what they are afraid of actually. From what I have been able to see, you need to create an account and to make deposits into this custodial account in order to be able to place lay or back bets (and to make withdrawals to get your funds). So it's not fully decentralized for me and funds could theoretically be locked in the same way as what Dexsport is accused of doing for example, if I understand how it works correctly. It's maybe due to being a betting exchange and not a classic sportsbook I guess but I don't think many "bad actors" fixing matches would risk to get their funds locked there while fully non-custodial sportsbooks exist to be honest.
This is a great point. I guess they are scared after the whole Fairlay scandal that took place recently where match fixing was involved which is why they are trying desperately to avoid such situations in the future.
Problem is that such bad actors usually find alternate ways to exploit them. These restrictions are just alienating potential customers if you ask me.