Without knowing anything about him, I wouldn't assume that.
If it was acknowledged that in many instances what is being called "trans" is in fact the symptoms of some other illness, yes, it would be quite a strange and not very nice thing to do.
But we are in a position where people, including doctors, are actually harming people with mental illness by saying that their symptoms are something else entirely.
To me, that could be worth putting on a protest sign, not to stigmatise mental illness or any people who suffer from it, but because those people are let down plus all the other terrible outcomes that are caused by not recognising what is happening.
That being said, I do wonder how many people are likely to be reached with this sign at this particular event.
But - people should not be arrested for saying things someone doesn't like. I find it really ironic that anyone who knows the origins of Pride parades would think that is ok.