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I have read that people who convert to Hinduism do not belong to any specific caste.
If the concept of no caste (or Jati, Varna) exists, and we are willing to allow people to be free of the caste system, then why are there problems (or perceived misunderstandings) among the castes, for whatever reason?
Also, what practices for worship do the converts follow? If they follow a certain sect's way, do they automatically get considered one of that sect?
There has already been a lot of discussion on converting to Hinduism and about caste system here on this site. The OP's question is slightly redundant. But I will answer the last part which hasn't been talked about here.
And, what practices for worship do the converts follow? If they follow a certain sect's way, do they automatically get considered one of that sect?
A sect is not a Jati or caste. For example, Vaishnavam or Shaivam is a sect and it has followers from many Jatis.
A brief note on Caste :
Caste as we know of today is corruption of the Varna-Jati-Kula system. And this corruption was done by European Indologists' inability to comprehend the system.
Varna was occupational classification. Jati was occupational sub-classification and Kula was lineage. One was born into a Varna & Jati but was free to switch his Varna based on his/her aptitude & abilities. At times a whole Jati switched Varnas even till as recent as 1930s1.
Caste of converts to Hinduism:
When non-Hindus who become Hindus, they don't have to be part of any Varna or Jati unless they choose to, by taking up initiation. (Note that unlike some other religions, becoming a follower of Hinduism itself does not need initiation. One is automatically a Hindu when he/she follows Dharma. Refer to any answer to another question here).
For example one can follow the Vaishnava sect(like ISKCON) and not belong to a particular Varna/Jati. But if one decides to pursue the creation and distribution of Vedic knowledge under the sect full-time, they can choose to be initiated as a Brahamana(who by definition does only that). In fact ISKCON has a written test which needs to be cleared to become a Brahmana2.
For other traditional sects too, if one is qualified, he can take up initiation to be an acharya/brahmana. For example an archarya of a Srivaishanava mutt in Australia who theoratically is a Mleccha(foreigner) has been initiated as an Iyengar Brahmin by the Jiyar of Sriperumbudur3.
Hence if one merely wants to follow Sanathana Dharma but not dedicate his/her full time to a particular profession, they need not be initiated into a Varna or Jati but just remain a follower of a sect.
(Disclaimer: "Caste" is not part of "Hindu religion ", it is "feature/misfeature" of "Hindu society ", which has crept in. Varna is not same as caste. Despite all the misinformation being spread on internet about Caste in hinduism, it has no basis in Hindu scriptures. Islam religion has no concept of tribes in quran, but you have tribes in afghanistans islamic society too)
Now main question: how to tackle if somebody still asks your caste, and you do not know?
TL;DR answer: You should tell that your caste is shiva caste(or, vishnu caste)
DETAILED answer: When somebody(Say, a NRI hindu returning from foreign land)/new converted person does not know his gotra,caste etc; then in some rituals , pundits refer his gotra and caste as "shiv gotra", "shiv caste" . In this context, Shiva is considered as owner, destroyer, purifier of all the shiva-ganas and sects and castes and gotras, desh (country) and any other divisions here. Shiva who had consumed all the poison of samudra-manthan, He consumes all such unknown factors of the sincere devotee/worshipper. His worship is superceding any notion of gotra, caste, country, .. ; and hence can be used as filler.
Currently I have no scriptural reference at the hand, but this i have read and it is practised in my place too.
Note: Caste is not required in canonical hindu/vedic rituals, but in few "localized/vernacular rituals/rites"; the name, gotra, caste, forefathers name, village name/place of origin - of the worshipper is sometimes pronounced.
Hinduism is a religious cooperative encompassing dozens of different religions and hundreds of sects. So you can be initiated in a specific sect or sampradaya. Caste refers to your ancestral profession - hardly anyone follows an ancestral profession and everyone is free to choose their own profession or vocation - none of which are of any interest to “Hinduism” except perhaps the priestly profession. There is no central authority or induction committee, or application office or process that will allocate a vocation (Caste) to you and provide you with an ID card - Hinduism is fellowship of seekers which you can join in spirit through reading and adopting philosophy and values and practices or you can join a study or practice group.
