I think the issue with this tendency in some progressive circles to affirm the proliferation of multitudes of new genders and sexual identities is that: people on the one hand want to liberate themselves from being constrained by limited and oppressive concepts, but attempt to solve the issue in a way that keeps the basic problem fundamentally intact.
I think the basic problem is this: the assumption that for a concept to make sense and function properly, it must necessarily refer or correspond to something positively discrete, isolatable and readily identifiable in a matter-of-fact way. If you assume this, then it would seem reasonable that the way to escape gender and sexual binaries (man v.s. woman and hetero v.s. homo) is to just expand the number of gender and sexual orientations.
One consequence of this is that every new gender or sexual orientation that is posited always bears some relation to the binary, whether articulated in terms of degrees (ex: demi), combinations (ex: poly), oscillations (ex: fluid) or even negations (ex: non). This means that “liberation” through this means is fundamentally limited, because the validation of any of these identities presupposes the validity of the binary which these identities depend upon to make sense.
Perhaps you are fine with that, because you are not interested in destroying the binaries. But then this means that we have very different ideas on what it means to be truly liberated from oppressive sex and gender constructs.
However, if you do not assume that concepts must have an objectively corresponding reality in order to make sense and function, and instead recognize that all concepts need to do to function is to sort out certain qualities in the world as a means to direct one’s attention to those qualities, then we can start to use concepts in a much softer, and less oppressive, way. This would also make the practice of expanding the number of identities superfluous at best, and obstructive at worst, to the project of liberation.
For example, the idea of “lesbian,” understood in a very fixed way would be defined as a exclusively homosexual relationship between anatomically identical females. I would agree with many that perhaps this is too limited and limiting (it can exclude lesbian trans women, as well as lesbian cis women who have had histories sleeping with men and other non-women; it can also include too much, like pre-op hetero trans men). Now there are people who advocate for the validity of the concept of “bisexual lesbians,” or, women who prefer to sleep with or are predominantly attracted to women but can be open to being with or sleeping with (or have been or slept with) non-women. I think this is an incoherent concept attempting to mix together mutually exclusive categories.
A “soft” conception of the term lesbian may be defined simply as women who are attracted to other women. In the abstract, this ends up including women who are exclusively attracted to women, women who are predominantly attracted to women, and women who are attracted to women but might be attracted to non-women. This may seem to pose a problem, where the abstract definition is too loose and includes bisexual women. But in any actual context, there would be no sound reason for a bisexual woman to capitalize on the looseness of the concept in order to identify herself as a lesbian. At the same time, the looseness of the term still allows inclusion of people who are practically functioning lesbians but have histories sleeping with non-women, or who occasionally, especially in rare circumstances, fall for men or other non-women. It can also include people who are technically not exclusively attracted to women but choose to identify as lesbian as a political choice.
Now see what happens when we validate the concept of “bisexual lesbian”: this implicitly validates the notion that “lesbian” is a rigidly defined, exclusive relationship between women. One is first assuming that lesbian can only be rigidly defined, then attempts to fabricate a new sexual identity in order to “solve” the rigidity, only to end up reinforcing the rigidity in the process. One can argue that for most of the history of the concept, lesbian has already been functioning in the “soft” manner, and that now, with the current wave of “gender revolution,” we are actually regressing because people are attempting to define it more rigidly than ever before. Funny thing is, is that both “exclusionists” and “inclusivists” are participating in this process of rigidification, even if they oppose each other on a surface level (in fact, it is precisely because of the surface-level opposition between the two that the deeper structure of rigidification continues to intensify.)
The proliferation of sex and gender concepts do not liberate us from the prison of sex and gender, it only expands the number of prisons and decorates them to look like home.