Because this is all a political move. This so-called "EU sovereignty" drive is in fact aimed at further reducing sovereignty of the member states via further transfer of power and control to the EU.
These digital ID wallets do exactly that. Member states lose control of the ID infrastructure, which will now be controlled by the EU. There isn't much sovereignty left at national level...
This is totally not the EU version of China's social credit score system and WeChat SSO system.
It will totally not be used to sanction you the moment you become a nuisance to the EU elites by saying "wrong speech" that goes against their mandated doctrine or pointing out their acts of corruption or dismantling of democracy.
The EU building in Brussels even has the word "DEMOCRACY" plastered on the front in large bold letters[1], in case you forgot.
[1] https://audiovisual.ec.europa.eu/en/media/photo/P-069521
Each member state has to implement the system themselves. Where is the loss of control?