Exactly

What’s particularly strange about it is that it doesn’t really serve any purpose for a vast majority of people aside from a government-approved official statement that someone finds their in-laws unbearable.

That’s a pretty good purpose. Everybody can save face by taking part in bureaucracy. That sounds like I’m being facetious, but I’m serious. Think about the alternative: avoiding them awkwardly all the time or telling them to screw themselves directly, which will engender negative feelings. At least with the bureaucracy, the sentiment gets filtered through a impartial, uncaring medium.