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Citation needed. Like not saying I don't believe it, just want details.

Search /r/Bitcoin/ for banned from coinbase and you'll get plenty of examples: https://www.reddit.com/r/Bitcoin/search?q=banned+from+coin

Could you (or someone else) elaborate on Coinbase going beyond KYC requirements?

If you send BTC from Coinbase to an outside wallet they monitor it for activity they don't like (eg suspected dark market purchases).

Once you transfer outside of Coinbase it's none of their business what you do with it.

Coinbase is big, but not the best exchange.