I remember it being used at the "roast me" sub so the person verified they were actually the person in the image asking to be roasted.

Example: When famous people do an AMA. E.g. Obama did an AMA on Reddit and he was verified with a photo that would be very easy to fake today using AI.

So you can prove that you're black to post on BlackPeopleTwitter

I believe it is most often for nsfw purposes but what do I know about such things nervous

There are plenty of people making Instagram and OF accounts of fully AI girls. They are hilariously fake, but looking at some of the thirsty comments their posts get, I'm inclined to say that subreddits like /r/AmIUgly and /r/rateme are likely to end up with lots of verification posts that result in lots of scams.

Although, as already pointed out, verification posts have always been easy for people to scam with Photoshop.