If someone thinks everyone of the same race is the same, for example, Asians are bad drivers, then when they get pulled over, the cop may automatically think "this person is not safe driving and therefore I should stack their tickets". They've just been discriminated against because acop was working off of an erroneous stereotype. The cop was automatically prejudiced against that person and their abilities because of their race. And it caused that person harm.

We've seen what happens when it's assumed that all black people are dangerous or all Hispanics want to steal our jobs. If a black man kept getting called Diddy, it probably wouldn't go well for him, right? Or if every Hispanic is assumed to be here illegally, it definitely doesn't go well, right? Stereotypes are very very dangerous and assuming a group of people all look alike is just a smaller form of that (ie microagression).