Sometimes affirming people's delusions isn't wrong, in fact it might be the right thing to do. The best example of this I have read is the hairdryer story. Long story short, a woman has a pathological fear that her hair dryer will burn her house down and because of this she rarely stays out of the house for long, constantly going back to check on the hair dyer, and this basically ruins her work and social life. She went to many different therapists and tried many different approaches and none worked until she met a therapist who asked, "have you tried taking the dryer with you?"
This basically gave her her life back. She still had the delusion and paranoia that her hair dryer would burn her house down, she would just feel relieved once she remember she was carrying it in her bag or in her car.
The transgender issue is a bit more complicated no doubt, the surgeries and hormone treatment are more invasive and less reversible than carrying around a hair dryer and hence why on the issue of transitioning kids I am much more conservative. But for many transgender folks, their transition comes with better life outcomes. Of course when I use the term "woman", the vast, vast majority of the time I am referring to adult human females. But transgender folks are an edge case that I am okay with acknowledging as women. At the end of the day if I do run into a transwoman, I doubt it'll be in any capacity where her chromosomes or genitals are going to be relevant so treating her as a woman is little to no hassle for me and a big benefit to her.
There are references to transfolks in the Kama Sutra, something tells me they're not going anywhere.