It's an example of a useful concept being applied in a completely nonsensical way.
I think (though my understanding is pretty shaky!) that the idea of the "binary" was originally developed by French (existentialist?) philosophers. A "binary" system was a system of hierarchical relations between two different things - where one (inferior) thing was defined by not being the other (superior) thing.
Perhaps an example might be "forceful/yielding" where forceful is seen as superior, and yielding as inferior.
So "smashing the binary" in this context wasn't about smashing differences - rather, it was about smashing the hierarchy, ie accepting that the yielding is as valuable (albeit different) as the strong.
In the context of gender stereotypes, smashing the binary was supposed to be about promoting the idea that all ways of being - whether stereotypically masculine or feminine - are of equal value.
How in earth this has got twisted into the idea of individuals being "non-binary" I have no idea. The people who claim to be "non-binary" certainly aren't smashing the binary (ie, the hierarchical system of traditionally male and female stereotypes). If anything they are enforcing it.
They're fundamentally saying they don't conform to stereotypes - good for them, who does? But instead of inferring from this that the stereotypes are a load of crap, they're claiming that they are special people.
It's just self-important nonsense, ridiculous word salad.