They are used for demographics that are required by federal law for some business', for example filling out an application for a loan, they have to collect this information so they can prove they offer services to everyone regardless of race or gender. I realize that this is a joke from but most of the list include Male, Female, Other (with an input field), and prefer not to say. In case you wanted to know.

You can change that setting via the actually lemmy instance page. For me I logged into lemmy.world and the settings there set All and New. That setting carried over into whatever app I used.