Are there less stringent Know Your Customer norms while purchasing bitcoins through ATMs?
It's different per type of Bitcoin ATM and also in what country or state they are located, but when you purchase coins for the first time, you have to go through some sort of verification process. I know there are certain ATMs where you can just verify yourself with your phone number, but there are also ATMs that will ask you to verify yourself with your ID. In the latter case, I would never ever make use of such an ATM. You never know what is happening with your details. Imagine them passing your details to the government.... In the first case, you can just use a prepaid mobile phone number and buy your coins. Not much harm can be done here.
A phone number is fine. Even online services ask for phone verification. In some countries, you have to supply comprehensive proofs of identity even for prepaid numbers. If that is not done, then prepaid phone numbers can be used to avoid harm.
From my experience, most people using such ATMs are first time Bitcoin buyers or non-techie persons. For them it is abolutely simply. They put in a bill and get out a coupon with the public and private address holding the countervalue (minus the fees) in Bitcoin. They usually just want to try out the technology or want to save some money in Bitcoin in the hope of a positive price development in the future. They does not care about when they buy Bitcoin worth $100 to pay $7 in fees.
As long as you are buying small quantities, the convenience outweighs the costs. It makes sense for one-off purchases.