apushatayid
Sometimes these labels are necessary to protect our children. We label ourselves frum and secular frai so that our children can distinguish from people we don’t want them to learn from.
Similarly, there are hashkafic differences between chareidi and charda”l families.
Someone who is Alexander might want his children to follow the Alexander Rebbe but by labeling himself just “Jewish” his children might not recognize clearly the distinction between Alexander chassidus to Gerrer.
Someone from a chareidi family might want his children to maintain his hashkafos to the exclusion of charda”l haskafos.
This doesn’t mean that the chareidi person is a better Jew but he is entitled to teach his children to follow in the haskafos that he was taught. This tool teaches his children to draw a line between who they should learn from and who not.
This can apply to shidduchim too. I think once a family has determined that the ideologies of the other side are in tandem with their own, they then do make the effort to make sure that the person lives up to them in terms of middos etc.
The decision to label people did not start recently. Look in the chumash and you might notice that there have been thriteen labels in klal Yisroel going back quite a while. In addition to another two labels within one of those labels.