I believe those exchanges are still following the style of the traditional brokerage, and not that of casinos, which might frustrate you. Still, there will always be exceptions, especially if the fund is suspicious or the exchange is trying to confiscate your money stylishly. They can ask for proof of funds and other documents.

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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. Exactly what happened to me on Binance happened to me on MEXC but it was not several times and they also change my account to withdraw only. They did not also seized my coins.
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Thank God you were able to withdraw your money, but there could have been a turn of events if your money was big, you need to be careful. If I were you, I would have withdrawn all my money immediately after I sensed I used a VPN on Binance, Binance frowns on VPN, and they have always made it known on their website. So if they act harshly, I think they have a valid reason because you violated their ToS.

I understand this fear, and my advice is for you not to take chances. Only transact a small amount with them. Even MEXC. People's complaints show that exchanges seize people's money for even lesser reasons.