I have absolutely zero issues with someone wanting to live as the gender they were not born as. If that makes them happier and more comfortable in their own skin for whatever reason, that's fine by me. And if they want to make that change legal, it's no skin off my nose and I support people having that right.
I do however have concerns about why they feel how they do and I think that it's very important that we don't judge children based on socially created gender constructs. My child has a penis, that makes him a boy. The fact that he loves rough play, cars and superheroes is not because of that penis. The fact that he loves Barbie and My Little Pony does not mean he shouldn't have a penis. The fact that he'll wear a Luke Skywalker, Hulk or Elsa costume interchangeably means nothing other than he is a child who like imaginative play and has access to a range of costumes. The fact that he cares for his baby Anabelle and fusses over friends' babies means nothing other than he'd quite like a younger sibling. He likes glittery lip gloss and coloured nailpolish because colourful and shiny things are attractive to small children.
He is 100% free to enjoy whatever he likes and I suspect that if anything, that keeps him secure in his identity as a male human. If I started refusing to let him watch Barbie or play with his ponies because they are girls things, there is a small possibility he would start to question that identity. If I, myself, started to question his sexuality or gender identity and make long term assumptions about him because of his diverse entertainment preferences aged 5, I could create doubt in him.
If he ever in the future comes to me and tells me he feels he should be female, I'll know that it's because of some indefinable core feeling and not because he still harbours a desire and attraction towards things I forbade him from because of his gender. But now as a child he gets to like all children's things because I don't think the presence of his penis trumps a child's desire to play and explore any and all things that spark their interest. However I know this is rare and soooooo many parents I know in real life are working on genuine assumptions that their small daughter is gay/trans because she doesn't like dresses or their young son is gay/trans because he thinks bright ponies with pet dragons and magic powers are great. It's honestly really weird.