KYC is a thing in Europe. Internet infrastructure businesses won't do business anonymously as they'd be held liable for anything their anonymous customer did.

Most European hosting providers don't KYC. Infrastructure providers are rarely held liable for customer actions in Europe. Most enforcement around this sort of thing is around sanctions violations (Stark Industries).

Isn't mullvad european?

Yes, but nobody is by default held liable for their anonymous customers. Otherwise you would not be able to buy anything with cash any more.