I think this simple question needs a simple answer.
So imagine your entire economy is 10 people sitting in a circle. Each guy always buys things (goods/work/services) from the guy sitting on their right.
For example, guy #1 buys farm produce from guy #2, guy #2 buys water from guy #3 etc.
As a circle they are a completely self sufficient economy. You can imagine it any way you like so that that is true.
Guy#1 has 1 Euro. S/he buys from guy #2 with that one Euro. They buy from guy #3 with that one Euro.
There is only one Euro. It goes round in a circle, in the opposite direction to the flow of goods/services.
The economy is such that the flow of 'stuff' they each need requires them to purchase approximately every day.
By the end of the month each has produced 30 Euros worth of stuff and each has earned 30 Euros (while spending 30Euros). The total earnings for the group is 300 Euros. All of them broke even, and all of them are completely satisfied, happy, and praise their social order as a marvel of modern economic theory.
This is what is meant by 'velocity of money'. (The terminology is actually incorrect, and is better described using signal theory, such as frequency and amplitude, but 'velocity' is what is used by most economists).
In that economic model there is only one Euro.
Now imagine along comes a C19 for this society and everyone is told to stay at home.
Suddenly there is no production and no consumption.
Your question 'what happened to the money' sort of does not make sense, now that you understand it all right? You now know there is only one Euro there, but it does not matter.
Of course, the above is a ridiculous oversimplification, but as an explication in response to your question it is at an appropriate level.
Now imagine a much more complex economy, our society, with many, many such loops arranged in a vast tapestry. Essentially you have the same thing, with many emergent dynamic properties, chaotic behaviors, a huge 'game of life', but by suppressing activity you are suppressing that which 'they' call 'velocity'.