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One example is in the nature of concept-formation. Specifically, what concepts should be formed in the first place? There are an infinite number of potential concepts we could choose to create and retain, so we have to have a way of selecting. What kind of criteria do we use? How do we filter out bad candidates? Or do we need to at all?
The last question is worth answering first. The answer is definitely, yes. One reason we abstract concretes into concepts in the first place is that it's inefficient to try to maintain all of that information separately. It's only by retaining the information conceptually that we can expand our mental horizon past the range of the immediate. Otherwise, we'd suffer from information overload, drowning in a ocean of data. The same would be true if we didn't select which concepts to form and maintain.
Imagine you see a blue car, with a bumper sticker on the back that says, "I hate vegetarians." You could easily form a concept, call it "COOLBLUECAR," which included the fact that it was a car, it was blue, and had that particular bumper sticker. Since there could be other COOLBLUECARs out there, it's a validly formed concept. But it's an epistemological nightmare.
The first major problem with it is that it's so specific, it'd overload your conscious mind. It'd be no different from trying to retain it as a separate entity. If you practiced that with everything you ran into, the benefits of conceptualization would disappear.
The next major problem is that it's too specific to be useful. Trying to retain that concept wouldn't be worthwhile, since it'd be used infrequently at best. Probably never used again. The cost of retaining it would surpass any benefit you might hope to gain.
A third major problem is that its differentia is worthless. There's little difference between a CoolBlueCar and just a regular blue car. The fact that it has that particular bumper sticker does make the driver appear cultured and intelligent, but you'd get the same result from a bumper sticker that said, "Vegetarians suck." The difference is too minor. You don't learn anything useful by putting it into a separate category. And that's an important part of concept formation, or just categorization. If you don't gain information by putting things into a different category, there's no point.
A fourth problem is that this particular concept has three differentia. It's blue, it has a bumper sticker, and the bumper sticker is insightful. The purpose of the genus and differentia is to determine the category of concepts it belongs to, and to show its difference from other concepts in that category. With three differentia, the question then becomes, what exactly is the genus supposed to be?
The issue here is that the concept is not well organized with the rest of your concepts. Its relationship to other concepts is vague and the connections are piecemeal. Where a good concept integrates nicely into your body of knowledge, this concept sticks out. It skips a few levels of conceptual hierarchy. There's a concept for car, but there isn't one for blue cars, and there isn't one for blue cars with a bumper sticker. Not that these can't be concepts, but we don't retain them as separate concepts. We retain the concepts CAR, BLUE, and BUMPER STICKER, and we combine them when we need to.
The last problem I want to mention is that by making a concept too specific, you're fighting against the purpose of concepts in first place. Instead of abstracting knowledge to see the connections between concretes, you're narrowing the focus onto a few specific attributes. The more specific the abstraction, the less useful it is because it doesn't convey information about almost anything else. Related to this is the fact that any significant attributes you identify with a COOLBLUECAR are likely better attributed to its parent concepts.
This should give you an indication of how we select concepts to form and retain. By understanding that our knowledge is intended to be useful to our lives, we're able to examine how useful or destructive an actual concept is.
Oh, and vegetarians DO suck.
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