You don't have to, if you're approaching from behind and they're facing away from you, then it's 99% likely you're approaching a friendly unit.
If you encounter a group of human figures facing towards you though, it might be the enemy, or it might be friendlies.
The shape of your figure, and movement (humans are good at spotting movement), and your hat/helmet, will give away your position far before the enemy notices there's a patch on it.
There's only 2 possibilities, they're facing away from you, in which case you have the drop on them, even if they're enemies, or they turn to look at you, in which case you can immediately tell who they are from the patch on their helmets. It's slightly better than colored armbands since anyone can get colored armbands and pretend to be on your side.
Not so much a problem for regular warfare, but for infiltrators it makes a difference. They'd have to know what patches the specific unit in that area is wearing.
The history of the PLA involves civil war where the enemies look exactly like you and you're using mostly equipment taken from them and with a whole bunch of defectors on your side. After that also came war with Vietnam where they look exactly like you and use similar uniforms and equipment.
I think a patch isn't ideal, but you need a way to tell quickly whose side those human figures approaching you in the distance are on, and bright yellow/red/white/blue armbands seem like a worse option than patches.
Here's a video from the 80s during the Sino-Vietnam Border conflicts featuring BIG patches on helmets. (around 8 minutes)