Alternatives in the form of some other CEXs certainly exist, but don't be fooled into thinking they operate in a different way. It might be best to check the AML score of your coins before each transaction, although that doesn't mean you're 100% sure that your account won't be frozen.
I know a centralised exchange would freeze funds even without any reason; it's for everyone, not only for me. That's the reason I haven't been holding large amounts in any exchange for longer. I am concernedabout previous issues. Though the support team said my account ban has been lifted and I can use the account regularly. Before list the ban I even can't login my Binance account. Suddenly saw an email from Binance about my account issues. So I tried logging in and talked to the support team. However, today also has traded a large amount of funds; still, everything is working fine for now. Hope I will not face any issues for previous mistakes.
You're completely right to not leave too much $ on a CEX. I'm not completely into the "not your keys not your coins" stuff since I use for example binance and nonkyc and others exchanges; maybe even some shady ones to acquire alts. But I realize there needs to be a limit how much one trusts a 3rd party.
This is true for any CEX, since they're all subject to some kind of internal or external regulation which is hard to bypass/can't be bypassed.
(Disclaimer: I work for a CEX. Yes I will say the above, even given my own position, because it a fact)