Google security is so strong, they'll even lock you out of your own account when changing cities, with no chance to get it reinstated :
https://www.reddit.com/r/Android/comments/5dif8j/psa_google_...
https://www.reddit.com/r/Android/comments/5dif8j/psa_google_...
Looks like Google is reinstating accounts.
Why would they ask for identification then close it after he provides correct identification?
Well, yes, since Google isn't providing their part of the story.
I have no reason to think the OP of that thread is misleading, I believe from their perspective it is an accurate account. You don't have to go too far to read similar accounts from others who got suspended over Google Pay/Google Checkout fraud flags.
Unless Google comes out and says the OP missed out key information, I'm going to just assume OP is telling us everything they know from their perspective.