We need to have a better definition of "similar options as a SEQUENCE to an IDENTITY"
Can we for example use UUID_SHORT() as the generated number ?
If yes, then this would be trivial to implement.
Another options would be using auto_increment columns or adding a hidden sequence object to the identity column.

The estimate assumes we can use something like UUID_SHORT() or auto_increment to solve this,.

How this is to be implemented is a good question, but note that an IDENTITY column doesn't have to be a PRIMARY KEY which means that AUTO_INCREMENT will not work always. There may also be more than one IDENTITY column in a table. This is true both in the specific case of Oracle as in the more generic case of ANSI SQL.

It should be relatively straightforward to implement
GENERATED [ ALWAYS ]AS IDENTITY [ ( identity_options ) ]
part with following identity_options:

START WITH integer
INCREMENT BY integer
MAXVALUE integer | NOMAXVALUE
MINVALUE integer | NOMINVALUE
NOCYCLE, NOORDER, NOCACHE

I'll estimate this part as 1w.

CYCLE, CACHE and ORDER is something new to us, and may or may not take extra time.

I'll reserve 3d for it.

The BY DEFAULT part
GENERATED BY DEFAULT [ ON NULL ] AS IDENTITY [ ( identity_options ) ]

is around the same 1w.

SQL:11 standard is aware of the following IDENTITY properties:
START WITH <int>
INCREMENT BY <int>
MAXVALUE <int>
NO MAXVALUE
MINVALUE <int>
CYCLE
NO CYCLE

so these should be implemented as a core, dialect-agnostic part