They are limiting even keep walls so it does stop people from blocking.
You must not have been there before TC. People didn't just be like we don't have walls so houses are useless. You can still defend your city and maybe even have guards for when offline but can't just hide in a wall and be completely safe.
I've been there since day 0. As a matter of fact, we owned the first city with palisades because they were hard coded palisades that we built houses inside.
And just because at some point something that people were looking forward to didn't exist doesn't mean that wasn't something that people wanted and was a viable part of the game that was always promised.
If you're going to restrict people from building and upgrading cities and their defences, just because they don't own a keep, I can tell you right now you are going to lose a lot of people and guilds that are looking for that kind of world building. And in a way the game is going to be less of a sandbox.
The issue were never cities with walls it was the abuse of walls in general to lock down areas.
How about a player city needs actual effort put into it before you can build walls, or at least bigger walls, around it. Give things more requirements, make things harder to maintain and no satellite walls. How about we actually look into solutions to the actual problem instead of removing sandbox aspects of the game in general.
With only one character per account house placement possibilities are more limited anyway. The world is also going to be a lot bigger.
Honestly, if it was on me I'd even have strong enough cities be able to build small keeps at some point.