I came across a video on Youtube discussing it (there are several), and Kowloon Walled City is just endlessly fascinating. A few notable videos I found on the subject were:
Kowloon Walled City: Hong Kong’s City of Darkness
Inside Hong Kong’s Kowloon Walled City
There is also a book on the city called City Of Darkness Life In Kowloon Walled City, which I found on archive.org in high resolution. It is full of photographs and detailed accounts of the comings and goings within the enclave.
> > > With no government enforcement from the Chinese or the British aside from a few raids by the Hong Kong Police, the walled city became a haven for crime and drugs. It was only during a 1959 trial for a murder that occurred within the walled city that the Hong Kong government was ruled to have jurisdiction there. > >
The KMT repeatedly sent requests to reclaim the entire region but Imperial Britain pretty much refused (they proposed a ton of alternative solutions) and didn’t govern it either. So yes, it’s Imperial Britain’s fault. Since the day Britain agreed to transfer the territory to the CCP there was a declared intent to demolish the place.