Most things have continuous features. Any kind of classification is of course arbitrary then.
It's arbitrary to distinguish these 3 types of T-Rex as well as it being arbitrary to draw a line between chicken and velociraptors.
Of course there's some point where most people agree that a classification makes sense, because there's a "well d'uh" kind of difference, like the chicken and the velociraptor. At the other extreme you'd classify every individual, because they're all unique. People will endlessly argue where to draw this line. There just is no answer to the question how far we should go.
Simpler classifications are useful to enable communication on a broad level. I'd be disappointed to go to a hip-hop concert even though I expected techno. If you told me some subgenre from hip-hop however I might not have understood what the music is they played, because it's not my thing.
Fine classifications are useful to enable communication between enthusiasts/experts. The hip-hop heads will have their subgenres, and the techno people, too. There are distinctions which don't matter to outsiders, but they do matter to insiders.
The finer the classifications are, the less useful their distinction, and the more likely that your communication partner will not understand you though. Techno now has so many subgenres, that I'd be hard-pressed to explain a lot of them.
The problem is that nobody can meaningfully draw a line.