Actually, it was more likely that the introduction of more (and better) options for fiat on- and off-ramps (e.g., centralized exchanges expanding globally) that had displaced the need to do P2P trading for many.

LocalBitcoins was the first exchange for many bitcoin OGs -- especially for those in countries where there was no bitcoin exchanges. At some point LocalBitcoins required Identity verification / KYC, and they then lost a ton of traders at that period of time to Paxful. Paxful then later also began to require Identity verification / KYC. And though Paxful lost a number of privacy-conscious traders too, they managed to increase and hold (until this past year) their greater trading volumes.

Today, there's simply a lot more competition as well with other competing P2P trading platforms.

Person-to-Person bitcoin Trading Platforms https://cointastical.github.io/P2P-Trading-Exchanges/