My theory is that, other benefits (international courts, identification on the street) aside, it makes it harder for Hamas to release the identities of dead Zionists. They would use these photos in videos of sniping operations at times.
I think it would have a profound effect being a settler and seeing a blurry video suddenly go "oh this your your neighbour/brother/son/cousin btw lol" as they get ๐ป๐ป๐ป. Those pseudoanonymous blurs suddenly distinct human beings who their families and communities recognise being liquidated like the cowards they are.
Plus, the state will struggle to hide its casualty numbers if Hamas were to continue identifying their targets.