ID Protection is an add-on that you can purchase and then activate... it is not part of AVG Free but it can now be added to it if the user wishes....
AVG Identity Protection is an anti-malware product that will protect you from all kinds of Malware like Spyware, Bots, Identity Theft using behavioral technologies and provide zero day protection for new viruses. As malware gets sophisticated and comes in a form of normal programs that can open up your PC to the remote attacker for identity theft, Identity Protection protects you from these new execution based malware. It is a complimentary product to AV products.
If you don't want the protection... simply ignore it but some users will likely want to have the option. AVG Technologies simply made it available but is not forcing it on you or others. By including a place for the ID Protection to be monitored and maintained within AVG Free it allows the users that do take advantage of it to not have to start yet another interface to control it... it can all be done from within AVG Free itself.
Just as I thought. Its FREE like AVG Pro is free!
Alas, IDP is not free. It is behavior-based detection, so very useful for 0-day threat protection. Does not prevent such threats from launching but blocking them as they start doing something malicious and it is also very efficient in removal. But not free - available as a standalone or as part of the AVG Internet Security Suite