Primal's built-in wallet is actually provided by Strike, and they are a regulated money transmitter. The reason there is some light KYC is because you can buy sats directly within the app. Anything that interacts with fiat will always have KYC due to fiat banking regulations.

Primal made this tradeoff for at least two reasons.

First, their app is geared toward folks who are new to both Nostr and Bitcoin. nostr:nprofile1qyfhwumn8ghj7ur4wfcxcetsv9njuetn9uq3jamnwvaz7tmswfjk66t4d5h8qunfd4skctnwv46z7qg4waehxw309aex2mrp0yhxgctdw4eju6t09uq3wamnwvaz7tmjv4kxz7fwdehhxarj9e3xzmny9uqsuamnwvaz7tmwdaejumr0dshsz9mhwden5te0wfjkccte9ec8y6tdv9kzumn9wshszrnhwden5te0v9j8yefwwd6j7qg3waehxw309ucngvpwvcmh5tnfduhsz9rhwden5te0v9kxwmeww468smewdahx2tcpz4mhxue69uhkzet8d9ejuat50phjummwv5hsqgxkruautvltgsqwlkhxz6d9c972hueyddg5xcw7jwwwfgdqmfh0fgaw7x33 has often said that he thinks Nostr will onboard far more people to Bitcoin than Bitcoin will onboard to Nostr, and he wants Primal to be an avenue for that adoption. Therefore, it makes sense to allow new users to buy small amounts of sats (limited to $4.99 at a time last I checked) so they can start zapping right away, even before they have received any zaps from other users.

Second, Apple does not allow "in-app purchases" without them getting a 30%+ cut. For some stupid reason, Apple thinks that us zapping each other's notes constitutes "purchasing content" when it's really just tipping stuff we like, so Primal made them happy by giving them their pound of flesh for every in-app purchase of sats. Damus went a very different direction, removing the ability to zap notes directly within the app, and only being able to zap an npub's profile. There is also a third-party workaround to re-enable zaps on notes for Damus.

As for my favorite social clients, I am on Android, so I really like Amethyst, Coracle, and YakiHonne. Primal is also available on Android, but it requires me to paste in my private key, which I won't do, and it's really geared for the new user, not the power-user.