What is an entity (Entität) in the IAM sense?

An entity is an element of an IT system, such as a component or subsystem, that acts with a digital identity in a digital process; examples are identity providers, relying parties, services, applications and autonomous bots.

Note the footnote in the standard: in IAM "entity" is used differently from data modelling, where an entity is any uniquely identifiable information unit. In IAM an entity is a technical participant with its own identity, which is why machine identities and bots fall under it.