We now discover a second reason Paul chose to address his fellow Israelites as Jews in this section ( Romans 2:17-29). Not only was "Jew" a title that non-Jews used to describe Israelites, but the word "Jew" comes from the name "Judah," which means "praise." Paul was saying the person who really praises God is not one who merely wears the label of circumcision but one who really obeys God. Such a person has a circumcised heart (cf. Deuteronomy 30:6; Jeremiah 4:4; Jeremiah 9:25-26; Ezekiel 44:9). Heart circumcision is a spiritual operation that the Holy Spirit performs, not a physical operation that conforms to the letter of the Mosaic Law. The truly obedient person will not only praise God, but God will also praise him. He will not just receive the praise of men for his professed obedience to God. [source][source][source]
"These verses [1] must be kept in their context, which is that Paul is dealing with Jews and making a distinction between Jews who believe and Jews who do not believe. He is not teaching that every Gentile Christian is a spiritual Jew. Rather, he is teaching that every Jew is not a full Jew. A completed Jew is one who has had both circumcisions, the circumcision of the flesh, which is outward in obedience to the Abrahamic covenant, and an inward circumcision of the heart as an act of obedience to the new covenant." [2][source]
In Romans 2:17-29 Paul"s point was that perfect obedience is more important that religious privilege. Even though the Jews boasted in outward matters, the law and circumcision, they were guilty of failing God inwardly, as were the Gentiles. Really a God-fearing Gentile was more pleasing to God than a disobedient Jew because God delights in obedience. [source][source][source]