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First of all I am sorry that this was my wrong observation. I realized it after seeing stackrc file which contains all configurations needed for stack.sh devstack script.

Have pulled few lines from stackrc to put my understanding.

=> below replacement bash script assigns IDENTITY_API_VERSION=3 as IDENTITY_API_VERSION is not assigned any value before this line in stackrc file.

IDENTITY_API_VERSION=$(IDENTITY_API_VERSION:-3}

=> trueorfalse function assigns default value True to ENABLE_IDENTITY_V2 which is passed as first argument to this function in below line.

ENABLE_IDENTITY_V2=$(trueorfalse True ENABLE_IDENTITY_V2)

What this means essentially is both Identity v2 and v3 are configured for build and deployment in Ocata release. I confirmed same by testing openstack CLI commands by exporting OS_AUTH_URL and OS_IDENTITY_API_VERSION values to http://<ip>:5000/v2.0 and 2 for v2 and http://<ip>:5000 and 3 respectively.

I hope this all makes sense and helps someone who might have faced same confusion as I did.

Thanks.