This is the first time you've seen the claim, expressed as follows?

(1) "race" does not divide humanity according to any biologically justifiable criteria,
(2) "race" is used to provide a scientific halo effect to justify current social organization

(2) is obviously true - and is morally positive so long as the first assertion is false. (1) is controversial - but I've seen it expressed many times on LW and other places.

Offensiveness relies in the implicit premise that use of the halo effect when the underlying science is faulty is itself irrational / socially hurtful. That's isomorphic to asserting that the "Noble Lie" is immoral - which I thought was the consensus here.

I don't think I've seen "race" applied to animals-- "breed" or "subspecies" is what I'm used to?

I agree - I've never heard "race" used to categorize animals.