Judging an individual by membership of categories always introduces bias. Even if Mexican restaurants are for some reason worse on average, say 9/10 are bad, then assuming that a particular restaurant is bad because it's Mexican is biased. Sure, there's a 9/10 chance that it's bad, but it's unfair to treat it as bad without any other evidence.
Insurance companies do this sort of thing all the time.
No, it’s not unfair to treat it as bad without any other evidence. When all you know is “Mexican restaurant” you judge by that. You can’t live your life only making judgements once you have “all” the facts, as if that’s even possible. There seems to be this unspoken assumption that the thought process must be stereotypes leading to death camps. It is possible to say, “Based on my life experiences thus far I do not enjoy the company of black people/Mexican food/whatever” without thinking “and therefore we should kill all those people”.
The bias may be justified to you (since you just want to get a good meal somewhere and don't want a 9/10 chance that it's bad), but it's still unfair to the perfectly good Mexican restaurants that you won't eat at.
Fair is a word for children. It’s unfair to the Italian restaurant that you’re eating Mexican. It’s unfair to the grocer that you’re eating at a restaurant. It’s unfair that you’re buying groceries instead of seeds. As adults have told children for thousands of years, life isn’t fair.
Sure, but much of the fairness we argue about as adults is due to fundamental disagreements about morality or how the world should work. “It’s not fair that tax cuts benefit the wealthy.” Republicans think it’s not fair to take money from people who earned it. Democrats think it’s not fair for some people to have more wealth than they’ll ever use while others have so little. But the concept of “fairness” doesn’t do anything to help us resolve that disagreement.
But at the same time, there are some aspects of fairness that do appear to be innate - as in, they're observed in very small children regardless of the culture they're from, in experiments where they're asked to share (or not share) something that they have, or assess how someone else shared theirs. Extreme "wealth inequality" - as defined, say, through the amount of candy each child has - is universally seen as unfair, for example, although you also have to account for parochial altruism. Bonobos also demonstrate similar attitudes.
So it appears that our evolution as social species has set some hard boundaries. Abstract ideologies can go beyond them, of course, but their real-world success seems to correlate to some extent with how much they do or not - I would argue that ancap definition of "fair" is so unpopular precisely because it's so out-of-bounds wrt our biology.
It doesn't need to help us resolve the disagreement to be useful to explain why the disagreement is there in the first place, though.
And, in practice, there are large groups of people who do share the broad definitions of "fairness", and therefore saying that something is fair or unfair is useful to communicate the idea within those groups. This is not something that people really like to see put quite so explicitly, but when we say something "this should not be so because it is unfair", it carries an implicit "... and I don't care what those who disagree with me about what 'unfair' means think".
Insurance companies do this sort of thing all the time.