Historic IDENTITY data type creates an implicit primary key constraint. Our implementation of ALTER TABLE name ALTER COLUMN columnName IDENTITY have a trick for this purpose, but this trick tries to create a second primary key constraint if column already has it. Unfortunately, normal columns were also affected, it wasn't possible to add identity generator to a primary key column with standard ALTER TABLE name ALTER COLUMN columnName SET GENERATED { ALWAYS | BY DEFAULT } command. This trick is enhanced to create a primary key constraint only if it doesn't exist.

(I think we should remove this undocumented crazy data type in the future, at least from the regular mode, only regular and legacy modes have it.)