It also doesn't explain why "black" was preferred for a time, then it was verboten, and now it's preferred but you have to capitalize it. Nor does it explain why "African-American" was required for a time even though many Black people don't identify as African, and it's obviously completely inappropriate to apply to a Black person who has never left the UK, but that's what was required nonetheless.

Scott Alexander's hypothesis explains all of that. Constant change is what makes fashion fashion, and fashion is a very effective way to discriminate between the in-group and the out-group.