I guess reality in this context is what law makers make.
When saying "They", I presume you mean transgender people?
If someone says to me in the workplace that I'm a fat f and I should get my act together and go loose some weight I have several options - I can deflect with blaming my spine operation, I can hissy fit, turn around and walk away, I can stand my fat f ground and defend by trying to get the person in trouble or I can tell him/her (amongst many other options I havent listed) - youre right, keep telling me that everyday untill I finally start dieting and training again. I had a very smiliar discussion with a young lesbian couple few years back at my place during a party back when I was single. Not surprisingly, we came into a very strong agreement.
Definitely its a violation and if you think it works for you I think you should definitely sue them Sensei. In fact I’m surprised new borns or their parent are not sueing every day.