I work for a hosting provider, not Racknerd though so I can't speak to their processes. Main difference is that while we use Stripe, we don't use their ID verification service (and no customers have reported that Stripe has forced them to do so).

The post title is misleading. Yes, Stripe has an ID verification service, but Stripe isn't what is requiring your ID. Racknerd is using Stripe's ID verification feature against your payment because of some flag or policy on their end.

Why take my money, charge for a year of service, and then send me a link to verify myself?

This is standard operating procedure and happens in pretty much every industry that accepts online payments. Some flag, policy, etc. was indicated they need to take addition steps to verify you.

The biggest issue here is with Stripe asking me to verify my identity, even though I'm not using their service. Yes, they might be legal, but their intrusive behavior in collecting people's information is unreasonable and should not be tolerated.

I'll reiterate that Stripe did not arbitrarily force that on you, Racknerd did.

In the future, I recommend avoiding services that require Stripe for payment verification. Though it seems impossible to distinguish between the transactions that requires it and those don't.

This isn't useful advice. Racknerd forced the verification on you, not Stripe. I would recommend reviewing the terms of service and going from there. The hosting provider I work for explicitly mentions in the ToS that we may require ID verification. You can use nomenclature like that to a avoid a service, though Racknerd doesn't mention it in theirs so YMMV. Research and accounts from other customers can be used as well.

If the intent is to avoid ID verification, I would recommend ensuring the data you provide is accurate and up to date but there really isn't much you can do outside of that. You can thank fraudsters and abusers for ruining that for you.