A great deal of the current "identity" noise is political. The whole LGBTQ+ movement is a political movement. If people were simply accepted as "individuals" and their behavior accepted as "their behavior", then we would not need labels.
Race is likewise confusing. For example, most African Americans are mixed race. I read recently that the average African American derives 25% of their genes from white ancestors. That leads to the question what purpose does "race" serve, either as genetic distinction or a social one?
If it is a genetic distinction, at what point is someone black, white, or mixed. Was Obama the first "black President" or the first "mixed President"? And why does it matter?
If race is a social distinction, then why can't Rachel Dolezal be "black", and Elizabeth Warren be Native American. And the answer is both race and gender are being used politically to allocate power and outcomes... Should someone like Elizabeth Warren occupy a university position reserved for a Native American because she identifies as one.
Progressive liberalism uses gender and race to determine diveristy, equity, and inclusion quotas. Even as progressive liberalism can't figure out how to define gender and race and so in some cases it defaults to self-identification and in other instances it uses other methods.
If there were no quotas, there would be no need for racial labels or gender labels. They might exist as "terms" to facilitate communication, but not carry any specific power or purpose. Recently, some Native American tribes have had to redefine "race" and "tribal" identity. If those were real and not subjective, a person could not go to bed as one race and wake up to discover their racial or ethnic membership changed with a new definition.