From what I understand (wink, wink), it varies much, even within a city, as far as what you get away with. In one city I won’t mention that “some friends” went to a bachelor party for, it varied from no touching/just looking to strippers reaching down and unzipping peoples pants. And this does not necessarily have anything to do with the laws of the city. It has to do with the club owners and how much the city chooses to enforce the rules.
Does out and out sex (penis-vagina, unclothed) happen? No, not in the club. It may after hours, but not in the club. That won't stop even with these laws, though. In fact, the "after hours" outside the club action would probably INCREASE if the laws are changed because the strippers would want to make more money and the patrons would want more action than what is happening inside. "Dry humping", as it is affectionately known in high school and college? Yes, that happens. That is basically the definition of a lap dance. Again, though, some places there is no touching allowed and you are only seeing a girl dance real close. Depends on the enforcement of the laws in the area in addition to the actual laws. I know in the town where I went to college, the law on the books and the action in the club was much different.
This is a bad idea, in my opinion. The strippers will be losing money in the club because, as someone pointed out, its the one on one contacts the girls make that brings in the money. They make it hard to turn them down when the solicit you for a dance. There is an unwritten code almost about eye contact, where you should be sitting if you want some action, how you sit, what to tip, etc. Without direct tipping of the girls, everything is thrown off. I think they would turn more to straight after hours prostitution to make up the difference. Or simply bypass the clubs and go straight to the streets. One thing nice about the clubs is the girls are safe in there. One false move by a guy and they are out of the club. The woman are in control on the floor and in no danger of being physically harmed or taken advantage of. That is not true if they turn to the streets or to after hours action to make up the income gap. This may in fact increase crime in these areas. Its almost like legalized prostitution-light the way it is now, but at least the women are safe.