If suddenly someone gets access to your non-custodial wallet with KYC, then it is better to report it to the police.
I don't use any kyc self custodial wallet, i don't even think i know of any. However, if someone compromises your self custodial wallet, i don't see the need of going to the police, your funds are surely going, so you should create a new wallet and secure that better. Finally, i don't even think anyone should use any self custodial kyc wallet.
I let go almost a thousand dollars just because I didn't want to do KYC with some unknown international entity.
Yeah. Kyc can be dangerous.