When my daughter was in Yr 7 (roughly 14 years ago now, so before GID became more spoken about/aware of), she had short hair - and wore trousers to school. Entirely her choice, most girls in the school community wore trousers, not a problem in or of itself. But yes; my daughter did look like a boy, because of her hair style, which she'd chosen herself for easy management first thing in the morning, and which she'd felt so grown up about having.
Within 3 months of the school year starting, she was being bullied - in school and online through MSN Messenger (remember that?) by two boys in 90% of her classes. She was, apparently, a lesbian (although the word "dyke" was the term these boys used) because only gay women have short hair/wear trousers. The school initially seemed fantastic, promised to deal with it, spoke to my daughter (and made her feel like she was the problem; she's a girl, why was she deliberately making herself a target, and so on). I was in there every other day, my daughter felt as though I were punishing her because I refused to let her use the Internet (although most of the messages were sent during school hours, as I discovered upon hacking into her account), she started to self-harm and genuinely began to question her sexuality. Girls whom she'd previously been best friends with started to refuse to change in the changing rooms if she was in their lesson, she was ostracised basically... and the school kept telling me "we're dealing with it Mrs 13"
After a few weeks of their refusal to deal with the homophobic abuse going on in their school, despite evidence that it was happening on their computers, during those hours they had a duty of care for my daughter... I called the police. Cyber bullying amd homophobic abuse were the recent changes to the law back then, the boys who were instigating it were over the age of 10 (so knew right from wrong as far as the law's concerned), and my daughter's education was being disrupted through absolutely no fault of her own,
The police were fantastic. Sympathetic to my confused daughter, understood my maternal fury, disgusted by the school's imability to understand that crimes were being commited within their walls. Several meetings with the headteachers later, with stern police officers backing me up later, the boys were issued with restraining orders, their (allegedly oblivious) parents had the fear of God put into them because they were informed that I could have their sons arrested and charged with two separate crimes, and my daughter felt confident in remaining at the school - because she knew I would happily go to bat for her.
She grew her hair out, has actual panic attacks every time she feels it needs a trim, and has severe MH problems which may well have been triggered by this period in her life. She's also extremely confident in her sexuality, knows that she's heterosexual... but also that it wouldn't matter one iota if she weren't (my grandmother was a lesbian and set up home with her life-partner of 60 years during the early '50s). I truly dread to think what would have happened if she were 10/11/12 now, with the way in which children are seemingly being pressured to choose their gender identities/sexualities before the majority of them genuinely understand the concept and end up changing their minds seemingly on a whim/depending upon their peer groups.
So, @Overreactingmom, I don't think you're over reacting at all. Your daughter's confidence/self-esteem is what is being whittled away at - which could lead to issues later on in her life. And, frankly, the issue isn't with her at all, but with the boy(s) whose ignorance is clearly showing. Complain to anyone you can, show her that you have her back/love her regardless of her identity or sexuality, and support her.