I believe that labels are like nearly everything else: they have a purpose, but they are often used incorrectly. When thought of as finite and static they lose their purpose. The purpose of labels is to define someone at one particular moment in time.
We are ever-changing and ever-growing creatures. As is said: the only thing constant is change. Most contemporary psychological personality theory centers around the fact that personality changes over time and through different experiences and situations. There may or may not be some basic tenets to the personality and there may or may not be a biological component (as is debated often ad nauseam). However, just about everyone agrees that there are significant changes which happen over time in personality.
So, why would we want to think of ourselves in static finite terms? We wouldn’t! What fun would that be, to box ourselves in to one term or another, and yet we do it all the time. What are labels but nouns and adjectives? What are roles that we subscribe to but labels? The trap of labels is to believe that they are finite and never-changing, this is true of nearly any label.
The idea that we so often miss is that labels are a category, but not a be all and end all of what one person is or is not.
An example: you order a burger at a restaurant. While this is a burger, it could be made of beef, turkey, chicken, soy, vegetables, black beans, or something else entirely. It could come with: lettuce, tomato, onion, mushrooms, pickles, garlic, pastrami, bacon, swiss cheese, cheddar, pepper jack, provolone, smoked gouda, or any number of toppings. It could also have: mayo, mustard, ketchup, ranch, hummus, barbecue sauce, or any number of sauces. It could be served on: whole wheat, white, sesame seed, rosetta… I think you get my point. These combinations create an almost infinite number of variations under the common label of “burger.” So it is with any label.
Just because someone adopts the label of “queer,” for instance, or “slave” it does not mean that anyone else who inhabits these labels looks at all like this person. This queer slave could be male, female, transgendered, transsexual, masculine, feminine, genderqueer, etc. and may be a service slave, a sexual slave, both service and sexual, a brat, part-time, 24/7, a pro slave, live-in, or some combination thereof. This person could have various fetishes such as humiliation, force, objectification, boots, heels, non-sexual service, rope bondage, metal bondage, pain, or anything else. This person in other aspects of life could be a CEO, an artist, an auto mechanic, a teacher, a writer, a sys admin, a starship captain, or anything else.
I think you see my point with that as well. Labels are good for describing generic categories which someone is part of or embraces, but are not good for getting a specific idea of what the person is like, or even what they think, do, or feel. They give a general idea about one general area of a person, but everything else is up for grabs.
While I think we all know this to an extent, it is hard to get away from automatic categorization and stereotyping. I will be the first to admit that I often fall prey to stereotypes, though I have been working to train myself to ignore them, they are so ingrained in us that it is nearly impossible to get out of them. If we were to see someone was a 20 year old straight female slave, for example, I’m sure just from those four descriptors most everyone who read them formed an idea of the person. Even I did.
I think that labels are useful and necessary, and I definitely have a sort of OCD tendency to nitpick my own labels (so far as I have created my own label for myself as well) in order to best explain and express myself to the world, just as you said.
My point is that labels are often attached to other labels, when that may not always be the case, such as the thinking that if someone is x, y, and z, therefore they must also be a, b, and c.