The article examines the epistemological and existential status of psychiatric diagnosis in the context of contradictions between nosological (classificatory) and phenomenological approaches. It is shown that the dominance of evidence-based medicine and the focus on operational criteria of the ICD and DSM, despite all their advantages, lead to a reduction of the patient’s subjective world and the risk of turning the diagnosis into a “self-fulfilling prophecy.” This work aimed to present an existential-phenomenological perspective in which diagnosis is understood not as a static label but as a dynamic structure of “being-in-the-world,” setting the boundaries of existence while simultaneously opening a field for personal freedom and responsibility. Drawing on the ideas of K. Jaspers, M. Heidegger, A. Längle, L. Binswanger, and R. D. Laing, the authors substantiate the necessity of transitioning from “explanation” to “understanding” in therapeutic practice. Special attention is paid to contemporary discussions on the boundaries of normality and pathology, as well as to the critique of the reification of diagnosis. An original model of three phases of acceptance and integration of diagnosis into identity is proposed: confrontation, identification, and integration. It is concluded that genuine therapeutic work consists in helping the patient to acquire the ability to be the author of their own life within the objective constraints imposed by the illness, transforming the diagnosis from a “cage” into a “fulcrum.”