Further to the other answers, "sovereign citizens" are an interesting variant on a "cargo cult" mindset.

The cargo cults, if you've not heard of them, came about after WWII. The Allied forces, advancing through the Pacific, set up airbases on various islands. These islands had tribes living on them. The tribes got a crash course in the wonders of modern society, American army style. Unfortunately, the gap between their experiences, and the world they were now exposed to was huge, and brief. A lot of misunderstandings were made (either due to insufficient background knowledge, or bored/malicious information from the troops involved).

When the allies upped stakes and left, the tribes were left a little shell shocked. They had the bright idea that if they recreated what the Americans had done, they too could summon the metal birds from the sky, full of a vast wealth of cargo! They then went about reproducing everything they had seen. They built runways, control towers, and fake planes, to bait down the cargo planes. But it never worked! They obviously weren't doing it exactly right. So they tried harder, recreating all they could as closely as they could.

Now to us, this seems crazy. Of course you can't summon a cargo plane by sitting in a wooden "control tower" talking into a coconut! We have a larger context however. We know that those planes were sent, not summoned etc.

"Sovereign Citizens" have a lot in common with these cults. However, they are focused on the legal system. Most legal systems are convoluted and arcane. They are less designed, than accreted over time. Lawyers, and the hyper rich who imply them, use this to run rings around the systems in place. They used complex legal entities to game the system to their advantage.

"Sovereign Citizens" see this and thought "why can't we do that?". Unfortunately, they didn't understand what was actually happening. They tried to recreate it, but lacked fundamental information. Even worse, a number of grifters found them, and decided they were excellent marks. They fed them additional bullshit, and gave them ever more complex instructions to make their plans work. When they failed, it's obviously because they did it wrong, or got out-spelled, not because the instructions were BS to begin with.

In short, "Sovereign Citizens" are a mix of the desperate, the stupid (not always the same thing!), the brainwashed and the grifters, all wrapped up in an almost religious cargo cult.