Categorising between objects is what humans require to navigate the world and communicate observed difference but at what resolution does one re-think drawing lines between categories?

This is the root problem the whole world is grappling with IMHO.

Country borders? Gender lines? (Pick another...)?

At what point does a sibling become a new species. Is fungi more plant or animal. At what point is green on the colour spectrum.

How do we define the point as to when to stop drawing distinct lines and accept a certain "grey scale" while understanding that lines are required somewhere?