What are the legitimate Islamic boundaries distinguishing between arrogance and preserving one's dignity, and what is the optimal action in situations where humility is misunderstood, leading to belittling the person exhibiting it?

Arrogance is a blameworthy trait, whereas preserving one's dignity is a religiously commanded matter, for a Muslim should not demean himself. There is no contradiction between a Muslim's humility and preserving his dignity by not accepting humiliation and disgrace, or by speaking about oneself regarding a factual matter for a legitimate religious benefit. The Prophet, peace and blessings be upon him, said: "I am the Prophet, there is no lie; I am the son of Abdul Muttalib." And he said: "I am the master of the children of Adam on the Day of Resurrection, and the first to have the grave split open for him, and the first intercessor, and the first whose intercession is accepted."