The issue is that it causes collective harm to female people and children to use female language for a male person. As mentioned, this is nothing like using a requested nick name.
There are numerous ways it harms female people collectively, from being leveraged to convince organisations to change policy in ways that harm to causing confusion around reactions to information that would normally raise alarms to lowering the boundaries for consent.
There is pressure for some people to continue previously given consent if a person has had female language used when it was a male person all along being discussed. For instance, can I bring my friend x, she would love to come.
Safeguarding failures are missed because children have been told to use this kind language. For instance, she came into the toilet again today while I was there. Seems perfectly normal interaction compared to : He came into the toilet again today.
Or a young child trying to explain why they are uncomfortable with a ‘woman’s presence’.
We know of instances where male people have convinced organisations to change policy based on the fact that people use female language as requested. During a presentation to a sports federation, McKinnon / Ivy convinced the panel that it was cruel to exclude him and other male athletes because it would be the only time they were rejected as female because people used female pronouns meaning they treated them as female people. This is recorded in at least one interview.
Dr Upton said the same thing I believe to justify using a NHS communal changing room. There are others. Fred Wallace is another and I can think of others too.
I have recently had a friend in another country where it is not acceptable to reject a male HCP if they say they are female, had to cope with CPTSD being intimately treated even though she requested a female HCP specifically.
There are other harms that stem from using female language. It is not kind or respectful.