If you describe it like that it sounds like a classical descriptivism vs prescriptivism argument. Nazi Germany leaned hard into prescriptivism, trying to have hard rules for everything, while the US goes with a descriptivism "whatever the people call it is right".
But that sounds fundamentally incompatible with having a fixed list of categories, with that approach surely it would have to be a free text field (or at least a couple categories, along with either a text field or an "other" category, like with gender nowadays)
