Is that all there is to it? The player character asks why her name sounds a little unusual and she merely explains how her past has shaped it in a few sentences?
Without wanting to advocate for the devil too much, because I think the reaction was definitely overblown in the wider internet, and there's no need to blow fuses about, I think the main issue is how this doesn't fit the pattern games like this follow at all. Gis said this way upthread, but I think it's worth mentioning that it adds that facet to the character, but doesn't have the courage to add in the negative responses for evil characters that every other line of dialogue gets.
Because of that, it exists in a strange space, where there's a random trans character in the game adding nothing to the experience except for someone's political views about demographics, but then doesn't allow the same options to respond to them either. In a game that's big on choice and the impact that has, it seems stunted and cursory. The player is also forced to respond in a particularly bland and positive manner for no obvious in-game reason.
The thing is, in the grand scheme of things it's pointless, but if you look at this particular bit of the game in isolation as the article highlights it, it feels a bit rubbish. It would be like having someone in Neverwinter Nights saying "We have to elect Lord Tronald Dump our leader. He's the only one who would make Neverwinter Great Again", then the only response being "I hope that goes well" or "Okay, I'd like to ask something else".
Now I'm sure some people out there would already say "but that's saying that unless you allow a transphobic response in your game, you're not being authentic" and...well sorry but yes. Games allow you to play a character who's not a good person. In my recent NWN2 game I straight up murdered a wounded druid stuck in the form of a wolf. The game let me do that, and while in the real world we would never condone that, it's not real in game, and laws and politics don't really apply. There were consequences to that though, a massive influence loss with the druid in my party who literally said I was insane for doing that. I got the chance to be more of an asshole in telling her that I killed him because he was of no use. That's the kind of level these games usually go to, so refusing to even add a "huh" or "I don't care" response feels like a softball set of options in order to pat the character on the back for being assigned male at birth. A lot of people think that has no place in a fantasy about wizards and orcs, at least where that's not accompanied by the full range of options and the accompanying consequences.