That's never been the whole rule. You're presumed innocent as a matter of finding a verdict, but your'e not, nor have you ever been, presumed innocent as a matter of evidence gathering and investigation. This law, whether or not it is a good one, makes the correct move in requiring that the officers have some probable cause to begin investigating you (i.e. asking for papers). One question going forward is: is your skin color sufficient probable cause? If the officers think so, then that's going to be unconstitutional. However, how about if you're sitting in front of Home Depot in dirty clothes, not going in or out to buy anything. Is that probable cause to think you might be an illegal day-laborer? It's not sufficient to arrest you, but it's sufficient (most likely) for the officers to ask for your papers, i.e. to begin an investigation.
Compare it to less onerous laws. Right now, any officer in any state can ask you a question while you're walking on the street. You're entitled to ignore it and keep walking, and they can't just arrest you for that. However, let's say it is 2am and you're in a residential area. Now, the officer might have some concerns as to why you're walking around. In the interest of safety, he wants to know your name. When you're uncooperative, he might have enough probable cause to think you're there for criminal reasons. What if he sees what looks like a burglar's tool? (most states criminalize burglar tools).
If this law is enforced reasonably, it won't be trouble for anyone but criminals. If it's enforced unreasonably, it'll be wildly unconstitutional. The question is going to be the police, ultimately.