Typically, to the account holder either (a) after they submit the requested documentation or (b) after 180 days if their account was terminated in order to cover future chargebacks. You just don't read that part of the story because people write about it on day one, not after they understand and have resolved the problem.

It doesn't "go" anywhere, it's just a balance. It remains locked until some resolution of an investigation happens, it's no different than when a bank account is frozen.