I remember days that I forgot to off my VPN but using it to open Binance, it happened repeatedly and Binance was warning me but after several warnings, they told me to do the third verification which was proof of address or something. But it was not by force because i can withdraw my coins and they gave me deadline. My money was not seized.
That's the modus operandi of Binance. Once Binance sights that VPN is in use, it definitely will ask for further verification. It doesn't joke with that "breach" with the use of VPN. I know it's for better security for its users, though we feel it's cumbersome and inconvenient for us. I've never used a VPN on any exchange as I've heard stories like this from others who made this type of complaint. Again, Binance (maybe other exchanges too) won't freeze anyone's funds for lack of updating KYC. Rather, it will restrict use of certain features and they allow for only withdrawal, no deposit. I experienced this with OKX when it ceased operations in my country because of government policy.