To be completely honest, it drives me up the wall that instead of trying to remove sex/gender based restrictions and stereotypes, society has instead turned to the generation of endless gender identities to reflect normal human variation.
That said, I am also aware that younger people with sex dysphoria have been surrounded by this kind of ideology since birth, and that that will undoubtedly influence the language they use to express themselves. As such, on an individual level, I will use the pronouns and name that they prefer, because their involuntary immersion in an ideology that fails us all does not preclude the possibility they suffer genuine sex dysphoria.
I appreciate the concern that young people without sex dysphoria are also getting caught up in it, and that by using someone's preferred pronouns and new name could encourage it further. However, in my experience, refusing to do so inflames rather than ameliorates the situation. People are made to feel personally attacked and become very defensive, which shuts down the ability to engage them in an open exploration of their feelings. Instead, I think it is better to challenge stereotypical ideas, and explore different possibilities in a non-judgemental fashion, rather than trying to debate their personal identity itself.
To provide a more concrete example, I was asked to provide advice by my aunt and uncle to a 15 year old cousin who was questioning his gender. He had always been a sweet and sensitive boy, and we had suspicions he may be gay from a young age. Of course that resulted in horrendous and incessant bullying. He had already started using a girl's name by the time we spoke, which I used alongside 'she/her' pronouns. It became clear to me very quickly, that this was a very unhappy young person, desperately searching for a place in the world where they would be met with love and acceptance. His mother had tried to talk to him about his feelings, but it's hard for any teenager to talk about things like their sexuality or private parts with their parents. It was much easier for him with an older cousin, who he knew to be trans, and it became clear that whilst he had some body image issues (as with almost any teenager), he wasn't distressed by his biological sex itself.
I think if I had then started with 'then you're not trans', that would have resulted in him feeling judged and interrogated. Instead we explored the reality of medical transition - both the possible benefits that can arise from it for some people, and the way it can go very wrong for others. I was honest about the difficulties in my life, the nature of the distress that I had felt, and the relief that medical interventions had provided. That resulted in him saying that he wasn't sure if changing his body was right for him and that he wanted to think about it more. He remained using a female name and pronouns for a good few months, but my aunt told me that the constant begging for hormone blockers had diminished. She also found a local LGBT youth group, where he made friends with kids identifying in lots of different ways, including gay, lesbian and trans.
The female identity persisted for a while longer, followed by non-binary, and ending with saying he was a gay boy. Today he is 20, is very gender non-conforming but happily lives as a man. He is at university, and has lots of friends who love and accept him exactly as he is. I am extremely relieved he did not change his body, and live to regret it. I'm also very glad I didn't go in all guns blazing when I started to have some doubts over whether medical transition was right for him. I think all that would have resulted in would be him shutting down, and losing the one avenue where he felt supported to explore his feelings.