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At that point it is more associated with the revolutionary movements subverting the old order than with a prop for the state since the primary group identities of the ruling elites in most of Europe then are as royal subjects, as socio-economic castes, and religious. That remains the case until the mid nineteenth century - the movements for German and Italian unification, for Polish, Hungarian, and Greek independence are seen, and see themselves, as of the left, attacking the oppressive social order of the non-national elites in the name of the nation as a whole. That would quickly change over the next couple decades as states and ruling elites embraced nationalism as a source of legitimacy, while the new Marxist left tentatively retreated from nationalism (though only tentatively and as the anti-colonial movements showed, nationalism could remain a powerful left wing force even with a Marxist cast).
I also don't see any reason to see national identity as particularly bad. Group identities are going to exist and they can be harnessed for good and bad ends. And what this has to do with capitalist exploitation or the concept of corporate personhood is unclear to me.
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