I think the labels are entertaining
It was fine when it was just on one's homenode and e.g. Saints in our Book
. But I do not want people influenced too much from seeing "Argel (Priest)" over and over again (*). There really needs to be a way to opt-out completely -- i.e. where no one would see the title (besides the usual places before this change).
I also find them distracting and dehumanizing. Without the titles there is just the user's nickname to go by which helps personalize it. But now I have already found myself focusing on just the title -- e.g. "oh, just an Acolyte, I'll skip reading that thread". The XP system is meant to encourage participation -- not forming cliques, elitist attitudes, etc. You might want to meditate on what some of the long-term ramifications of this change will likely be.
(*) Yeah, I know -- I should stop posting! ;-)