For example: if you deposit 1 bitcoin and bet 0.0001 3 times on low stakes(then there is reason to lock your funds).
Go to Live Support if this is still on going.
There is no reasons for bitsler to lock his account and ask for KYC if there is nothing suspicious with the account.
It seems that you have provided a good example, as any sites may do the same thing if there is an account do big deposit but made few small bets only then try to withdraw it.
Account did something like that will be suspected as doing money laundering in most casinos.
I signed up June 4th, made a deposit of 10mBTC to just try this site out, placed 3 bets on CS:GO matches in 7 days, yesterday I tried to place 4th bet but I got massage "you're not allowed to bet", I reached out to support and they aswered that I need to make KYC veryfication, when I asked why they just give me this copy paste answer, that this is standard procedure and they request KYC to "protect players"... This is the whole story.
BITSLER is very careful with their TOS. They are very sensitive to some countries and have active IP bans for several countries. There are restrictions for players from the Netherlands, France, and the USA. I don't think if anyone would have broken their TOS, however, they will lock someone's account without any reason. I think it would be appropriate for you to complete KYC successfully.