What is the truth about putting liquids in a plastic bag?

I feel like this is so inconsistently enforced and the uncertainty irritates and stresses me out every time I fly. I assume the 3.4 oz limit still applies, but do all liquids really have to be fit into a quart size plastic bag? Am I wasting my time by continuing to do this in an attempt to follow the rules? Does TSA just not care anymore? Is it only true liquids now rather than things like sunscreen and shampoo?

Someone, please quell the storm in my head.