As you allude to, I think 'gender identity' has shifted away from commonly accepted definitions of gender. Gender, by most definitions, is binary, because it's a way of describing 'masculine' and 'feminine' things. These are the only 2 defined parameters. On the other hand, 'gender identity' is now used to just mean 'personal identity', hence the infinite number of genders. Now people who are gender non-conforming are told they might be transgender, or might be non-binary, or an infinite number of identifiers. This doesn't help to fight against gender stereotypes and gender roles, it reinforces them. This is different to gender dysphoria which appears to be a mental condition.