In certain communities they are pretty key. For example, I lurk a lot of trans meme subs on Reddit where user flairs are important for knowing the right pronouns to use for somebody and post flairs are important for content warnings.
this post was submitted on 04 Jun 2023
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As a mod, I use userflairs to restrict certain people from posting, which cuts down on offtopic posts. And yes people can intentionally incorrectly flair themselves, but in general they won't do that (most rule breaking offtopic posts aren't done intentionally, they just never read the rules).
So it's an easy way to manage a space.