I'll ask this question using very simple examples working in flat cartesian space (just $2$ spatial dimensions). I'll be using the Einstein summation convention throughout this question, but since I'm very new to this I will explicitly write the summation symbol at times.
According to this article on raising and lowering indices on Wikipedia the identity matrix, can be represented as a Kronecker delta metric tensor (of type $(0,2)$), $$\delta_{ij}=\begin{pmatrix}1&0\\0&1\end{pmatrix}=\begin{cases}1 & \text{if} \, i=j \\ 0 &\text{if}\, i\ne j\end{cases}\tag{A}$$ and its' inverse of type $(2,0)$, $$\delta^{ij}=\left({\delta_{ij}}\right)^{-1}=\begin{pmatrix}1&0\\0&1\end{pmatrix}=\begin{cases}1 & \text{if} \, i=j \\ 0 &\text{if}\, i\ne j\end{cases}\tag{B}$$ are just the $2$d identity matrices.
But how does one interpret a type $(1,1)$ Kronecker tensor metric, $\delta_a^{\,\,b}$?
Here are some examples to put this question into context. Suppose we have a matrix $A_{ij}=\begin{pmatrix}A_{11}&A_{12}\\A_{21}&A_{22}\end{pmatrix}$.
Some of the following are correct expressions for $A_{ij}$:
$$\delta_{ik}A^{k}_{\,\,j}\tag{1}$$ $$\delta_{ik}\delta_{j\ell}A^{k\ell}\tag{2}$$ $$\delta_{k\ell}\delta^{k\ell}A^{ij}\tag{3}$$
$(1)$ is correct (equal to $A_{ij}$) as the dummy index $k$ in the matrix is 'lowered' using the metric. Then according to the definition, $(\mathrm{A})$, $\delta_{ii}=1$ and $k$ is summed upon.
$(2)$ is also correct as
$$\delta_{ik}\delta_{j\ell}A^{k\ell}=\delta_{ik}A^k_{\,\,j}=A_{ij}$$
$(3)$ is not correct as $$\delta_{k\ell}\delta^{k\ell}A^{ij}=\delta_k^{\,\,k}A^{ij}=\sum_{k=1}^2 \delta_k^{\,\,k}A^{ij}=2A^{ij}\ne A_{ij}\tag{C}$$
In the first equality of $(\mathrm{C})$, I think of this as 'raising' the second index of the first Kronecker metric in $\delta_k^{\,\,k}\delta^{kk}$. Since for a non-zero contribution $\ell=k$, which means $\delta^{kk}=1$, which is fine as this is what equation $(\mathrm{A})$ is telling me to do. So from this it seems like the $\delta_k^{\,\,k}$ is the trace of the matrix given in eqn $(\mathrm{A})$ (or $(\mathrm{B})$).
But I have another $2$ examples that seem to contradict this, suppose we have two column vectors, $U^i$ and $V^i$ along with their respective row vectors,
$$U^i=\begin{pmatrix}u_1\\u_2\end{pmatrix}\,\,\text{so that}\,\,\,\,U_i=\delta_{ij}U^j=\begin{pmatrix}u_1&u_2\end{pmatrix}$$ $$V^i=\begin{pmatrix}v_1\\v_2\end{pmatrix}\,\,\text{so that}\,\,\,\,V_i=\delta_{ij}V^j=\begin{pmatrix}v_1&v_2\end{pmatrix}$$ Now suppose we want to compute the inner product, $U\cdot V$. There are obviously many ways of doing this, and one could simply write $U\cdot V=U_iV^i$, but I want to purposely use the Kronecker delta metric to make a point. Here are some possible expressions for the inner product, $U\cdot V$:
$$\delta_{ij}U^iV^j\tag{4}$$ $$V^j\delta_{j\ell}U^{\ell}\tag{5}$$ $$U^aV_b\delta^b_{\,\,a}\tag{6}$$ $$U_iV^a\delta_a^{\,\,b}\delta_b^{\,\,i}\tag{7}$$
$(4)$ is correct as $\delta_{ij}U^iV^j=U_i\delta_{ij}V^j$, and the way I've understood this is that the $j$ index on the $V^j$ has been 'lowered' using the metric and the only non-zero contribution is when $i=j$, so writing these steps out explicitly, $$U_i\delta_{ij}V^j=U_i\delta_{ii}V^i=U_iV^i$$ since $\delta_{ii}=1$ according to the prescription in $(\mathrm{A})$.
$(5)$ is also correct for the same reasons as $(4)$.
Now for eqn, $(6)$ this is where the problem starts for me, since I am not sure what $\delta^b_{\,\,a}$ actually means, I can only guess that $\delta^b_{\,\,a}$ is non-zero only when $a=b$, so from this I conclude that
$$U^aV_b\delta^b_{\,\,a}=U^aV_a\delta^a_{\,\,a}\stackrel{\color{red}{?}}{=}2U^aV_a\ne U^aV_a\tag{D}$$ For $(\mathrm{D})$, since we are working in $2$d flat Cartesian space, this $\delta_{\,\,a}^a=\sum_{a=1}^2\delta_{\,\,a}^a=2$ is the trace or sum of the diagonal elements of $(\mathrm{A})$, (as $a$ is a dummy index and hence summed over).
In a similar way, I think eqn. $(7)$ should be $$U_iV^a\delta_a^{\,\,b}\delta_b^{\,\,i}=U_iV^a\delta_a^{\,\,i}\delta_i^{\,\,i}$$$$\stackrel{\color{red}{?}}{=}2U_iV^a\delta_a^{\,\,i}\stackrel{\color{red}{?}}{=}2U_iV^i\delta_i^{\,\,i}\stackrel{\color{red}{?}}{=}4U_iV^i\ne U_iV^i\tag{E}$$ In the first equality of $(\mathrm{E})$ there is a contraction of the $b$ index, where it get sets equal to $i$ since this is the only way to get a non-zero contribution out of the expression, I interpret this as the trace and that is where the factor of $2$ comes from in the second equality (marked with a red question mark above it).
I have then done exactly the same thing for the third equality and by my logic there is another trace so there should be another factor of $2$ which is in the fourth equality (these equalities are marked with red question marks as I'm not sure if these statements are true).
Now here is the problem, eqns $(4-7)$ are all correct expressions for the inner product, $U\cdot V$. So, the factors of $2$ I have introduced should not be there.
But the question is, why are these manipulations in $(6)$ and $(7)$ wrong, when eqn. $(\mathrm{C})$ used the trace as $\delta_k^{\,\,k}=2$?