Here is an ugly approach i use sometimes ...

(and I reuse your rfunc idea)

rf[True, Missing["Unmatched"]] := prev;
rf[_, b_] := prev = b;

previd = "";
prev = -999;
ds3[All, (<|#, val = rf[#ID == previd, #B]; previd = #ID; 
    "B" -> val|>) &]

Or try this not much more satisfying approach (the idea is to extract/work on the column then replace it in the dataset) :

foo[b_, Missing["Unmatched"]] := b;

ds3[All, {"ID", "B"}] // Values // Normal // 
      GroupBy[#, First -> Last, FoldList[foo]] & // Values // 
    Flatten // Map[<|"B" -> #|> &, #] & // 
  Join @@@ Transpose[{Normal@ds3, #}] & // Dataset

Here is an ugly approach i use sometimes ...

(and I reuse your rfunc idea)

rf[True, Missing["Unmatched"]] := prev;
rf[_, b_] := prev = b;

previd = "";
prev = -999;
ds3[All, (<|#, val = rf[#ID == previd, #B]; previd = #ID; 
    "B" -> val|>) &]

Or try this not much more satisfying approach (the idea is to extract/work on the column then replace it in the dataset) :

foo[b_, Missing["Unmatched"]] := b;
foo[_, c_] := c;

ds3[All, {"ID", "B"}] // Values // Normal // 
      GroupBy[#, First -> Last, FoldList[foo]] & // Values // 
    Flatten // Map[<|"B" -> #|> &, #] & // 
  Join @@@ Transpose[{Normal@ds3, #}] & // Dataset

Here is an ugly approach i use sometimes ...

(and I reuse your rfunc idea)

rf[True, Missing["Unmatched"]] := prev;
rf[_, b_] := prev = b;

previd = "";
prev = -999;
ds3[All, (<|#, val = rf[#ID == previd, #B]; previd = #ID; 
    "B" -> val|>) &]

Here is an ugly approach i use sometimes ...

(and I reuse your rfunc idea)

rf[True, Missing["Unmatched"]] := prev;
rf[_, b_] := prev = b;

previd = "";
prev = -999;
ds3[All, (<|#, val = rf[#ID == previd, #B]; previd = #ID; 
    "B" -> val|>) &]

Or try this not much more satisfying approach (the idea is to extract/work on the column then replace it in the dataset) :

foo[b_, Missing["Unmatched"]] := b;

ds3[All, {"ID", "B"}] // Values // Normal // 
      GroupBy[#, First -> Last, FoldList[foo]] & // Values // 
    Flatten // Map[<|"B" -> #|> &, #] & // 
  Join @@@ Transpose[{Normal@ds3, #}] & // Dataset