Aren't Graham and Dennett talking about different things entirely? Dennett is trying to help us understand better how materialism is compatible with having free will and a conscious self; his prescription here is to avoid a common pitfall, that of dismissing all "upwards" processing of perception and all "downwards" action-starting signals as "mechanical computing, not part of the self" and locating the Cartesian self at the zero-extension intersection of these two processes. It is better to think of the self as extended in both directions. When Graham says "keep your identity small", he is talking about a different sense of "identity" and "small", roughly "do not describe yourself with labels because you might become overly invested in them and lose objectivity and perspective".