Hi Tuka,
I don't include the 'must have gov Id' requirment, but i can understand why many hosts to include it.
Maybe this can help- While i don't force them to have a ID, i do force them to have a proper profile picture.
I have instant booking, so in theory i can't control who books in my place before they book, but if somone books without a proper picture, (and it happens fairly often) they straight away get their opening message with all the details and a firm but polite message about the profile picture, simply put, if your picture isn't a picture of you, clearly visable, and the same as the person who turns up at my door, you won't be let in to my apartment.
Only once has someone tried to ignore the message, and airbnb fully supported me, they also informed the guest that if they didn't change the piture, then no, i didn't have to let them in to my house.
Why is this relevant to you? Because if someone sends you an enquiry, if you inform them that yes you are happy to approve, but it is only on the condition of them uploading a copy of Gov ID before they arrive. Then you have the same situation. It's on your booking requirments, guests have warning before they arrive (and in this case before they even book) and you are perfectly complying with airbnb rules.
You won't be hurting your stats declining and guests can still book, but only on the understanding they add Gov ID, more than likely it's newbies who just need the shove to add the ID and will be fine later on.
I've never had this affect my reviews, the guest who ended up with airbnb involved left no review, and in fairness they were before i made a point of sending the message straight away, the worse i've had is having to send a follow up reminder message to a guests a week later, and they added the picture, apologised heavily and were lovely guests.