Less Wrong is a community blog devoted to refining the art of human rationality. Please visit our About page for more information.
Countersignaling can backfire if your audience doesn't have enough information about you to start with. For some traits, it's especially dangerous, because you're likely to do it for traits you don't have the credibility to countersignal at all based on a misunderstanding of your relation to the general population.
Countersignaling is "showing off by not showing off" - you understate, avoid drawing attention to, or otherwise downplay your communications of and about some valuable trait you have, because a) you are sure you won't be mistaken for someone with very poor characteristics in that area, and b) signaling could make you look like a merely medium-grade specimen. (Actual medium-grade specimens have to signal to distinguish themselves from low-quality ones.) For instance, if you are so obviously high-status that no one could possibly miss it, it may be both unnecessary and counterproductive to signal status, because this would let others conflate you with mid-status people. So you can show up in a t-shirt and jeans instead of formal wear. If you are so obviously brilliant that no one could possibly think you're some crackpot who wandered in off the street, you can afford to rave a little, while people who have to prove their smarts will find it expedient to keep calm and measured in their communication.
In homogeneous communities, or in any situation where you are well-known, countersignaling is effective. Your traits exceeding some minimum threshold is assumed where everyone's traits so exceed, and so failing to signal is unlikely to give anyone the impression that you have somehow managed to be the only person in the room who is deficient. If you're personally acquainted with the people around whom you attempt countersignaling, your previous signals (or other evidence to the effect that you are awesome) will already have accumulated. It's not necessary to further prove yourself. In other words, if your audience's prior for you being medium-or-good is high enough, then your not signaling is evidence in favor of good over medium; if their prior for your being medium-or-low is too high, then your not signaling is instead evidence in favor of low over medium.
But there are some things you can't effectively countersignal.
Or rather, there are some things that you can't effectively countersignal to some people. The most self-deprecating remarks about your positive qualities, spoken to your dear friends who know your most excellent traits like the backs of their own hands, will be interpreted "correctly", no matter what they're about. For instance, when I explained my change in life plans to people who are very familiar with me, I was able to use the phrasing "I'm dropping out of school to join a doomsday cult"1 because I knew this sounded so unlike me that none of them would take it at face value. Alicorn wouldn't really join a doomsday cult; it must be something else! It elicited curiosity, but not contempt for my cult-joining behavior. To more distant acquaintances, I used the less loaded term "nonprofit". I couldn't countersignal my clever life choices to people who didn't have enough knowledge of my clever life choices; so I had to rely on the connotation of "nonprofit" rather than playing with the word "cult" for my amusement.
Similar to close personal connection, people in a homogeneous environment can readily understand one another's countersignals. Someone who has joined the same cult as me isn't going to get the wrong idea if I call it that, even without much historical data about how sensible I generally am in choosing what comes next in my life. But in the wider world where people really do join real cults that really have severely negative features, there's no way to tell me apart from someone who's joined one of those and might start chanting or something any moment. I would not announce that I had joined a cult when explaining to a TSA agent why I was flying across the country.
The trouble is that it's easy to think one's positive traits are so obvious that no one could miss them when really they aren't. You are not as well known as you think you should be. Your countersignals are more opaque than you think they are. If you tell a stranger you've joined a cult, they will probably think you actually joined a cult.
Here's an example at work: in a homogeneous group of white liberals, talking casually about assorted minority races is commonplace if race is going to be discussed at all. Everybody present knows that the group is a homogeneous group of white liberals. Nobody has reason to suspect that anyone in the room has ever been disposed to practice overt racism of any kind, and odds are that no one in the group is well-informed enough about implicit biases to suspect covert racism (even though that's almost certainly present). So people in the group can countersignal their lack of racism to each other with the loose, casual talk, making generalizations when it's convenient. Nobody listening will take them for "real" racists. And being hyper-concerned with political correctness would make one seem concerned with being racist - it would look like one considered oneself to be in some kind of danger, which doesn't speak kindly of how well one is doing to begin with.
But to an outside observer - especially one who is informed about implicit biases, or has personal experiences with how ineffectively people screen off casual attitudes and prevent them from causing bad behavior - feeling that one is in this kind of danger, and speaking carefully to reflect that, is the best-case scenario. To an outside observer, the homogeneous group of white liberals cannot credibly countersignal, because there are too many people who look just like them and talk just like them and don't have the lovely qualities they advertise by acting confidently. In the general population, loose race talk is more likely to accompany racism than non-racism, and non-racism is more likely to accompany political correctness than loose race talk. The outside observer can't separate the speaker from the general population and has to judge them against those priors, not local, fine-tuned priors.
So to sum up, countersignaling is hazardous when your audience can't separate you from the general population via personal acquaintance or context. But often, you aren't as different from the general population as you think (even if your immediate audience, like you, thinks you are). Or, the general population is in poorer shape than you suspect (increasing the prior that you're in a low-quality tier for the quality you might countersignal). Therefore, you should prudentially exercise caution when deciding when to be uncautious about your signals.
1I am visiting the Singularity Institute.