This isn't a problem. It's a man in a dress.
The problem is what gets teamed with it. For example, telling men (and women) that they need to be dressed a certain way, telling young boys that if they like dresses they are probably girls (so let's put you on puberty blockers, resulting in sterility) etc.
The other problem is people clamping down with bigotry on anyone that doesn't conform to sexist stereotypes.
It's just a man in a dress. Perhaps he "identifies" as a TW. Perhaps not. Either way, he's still a man in a dress. If it transpires that he is a TW and would prefer me to use she/her to describe him, I have no issue with that and would make that switch. I'm still aware of biology - so it doesn't change anything in that respect.
He's not dressed in any sexualised way. Therefore, no issue in front of kids. Obviously if he starts overtly getting off on kids seeing him dressed as "a little girl", or has any known history of autogynophilia then he absolutely shouldn't be given a platform to play out a fantasy. That's one of the reasons why there are safeguarding checks when adults work with children. But unless we know this, it's just a man in a dress.