We examine the behavioral impact of a user location disclosure policy on Sina Weibo, China's largest microblogging platform, using a unique high-frequency dataset of uncensored engagement, including tens of thousands of comments and replies, on prominent government and media accounts. The policy, publicly justified as a measure to curb misinformation and counter foreign influence, was abruptly rolled out on April 28, 2022. Using an interrupted time series design, we find no decline in participation by overseas users. Instead, it significantly reduced domestic engagement with local issues outside users' home provinces, particularly among critical comments. Evidence indicates this decline was not driven by generalized fear or concerns about credibility, but by a surge in regionally discriminatory replies that raised the social cost of cross-provincial engagement. Our findings suggest that identity disclosure tools can have unintended consequences by activating existing social divisions in ways that reinforce state control without direct censorship.