Prop 65 seemed like a fine idea. Let's make sure people know about the carcinogens in their daily lives! Oops, now that stupid sticker is on everything, because you've created a fear in the minds of retailers and manufacturers. It's entirely useless, nothing has improved, but now people spend additional time wasting paper and ink and resources to stay clear.
Or for a more recent backfire example, see the FDA's new rules on sesame seed labeling (https://reason.com/2023/07/28/fda-commissioner-no-one-envisi...)
The law itself thinks it's covering a hole in existing protections, so people are going to modify their behavior accordingly to make sure they don't get in trouble. What's the easiest way to do that? For Hindus already employed, they can take extra care to ask about a candidate's background to ensure they're not skewing their workforce. Indians applying for a job now get to check a box next their caste. Most will probably check "prefer not to say", or maybe they check whatever one they think will give them an advantage. For non-Hindus, they can just decide to hire Mike Smith, who doesn't even know what a caste is. There's this whole new thing that must be accounted for, and those doing the accounting will find the easiest path through it.