The exchange are doing so to protect their image too based on the government policies, I guess.
So, when they cease those coins, how sure are we that they will take it to the government?
They can freeze your account and seize your bitcoin firstly, then they can ask you proof of your fund, its origin and if they are convincing with your proof, they might return those coins to you but your account will very likely be terminated forever.
If they are convinced with the proof then it is more likely that the access to the account will be restored. This happen to me at one of the centralized platform that based in our country. They had my fund frozen and required me to do KYC together with the source of funds. So I did send the documents and proof and once I got it cleared, they unfreeze my account enabling me to get a full access to my account.
The instance where they will not restore the client's access to the account is when the platform had proven the case against the client or not convinced with the evidence. Mostly fund will be confiscated, having the platform return the fund to the blocked account owner can be a great consideration to the platform.
Storing your coins on centralized exchanges is always very risky and it's warned to avoid as most as possible.
Yeah, I agree, don't leave our funds on the exchange for too long.