While I understand what the priest is saying, I can’t say I fully agree in how to handle it and address someone. He’s right in that it is a psychological issue. But I think we need to be careful when calling it a spiritual issue. Certainly some cases may be, but most are “gender dysphoria”, which is something actually diagnosable in DSM-5 by psychologists/ psychiatrists. Just as we don’t call an exorcist on everyone with schizophrenia, we need to use prudence here too.
I believe the better authority on something like this would be mental health professionals. And as far as I know, in most cases it is preferable to call an individual by their preferred pronoun or a neutral pronoun, because the negative consequences of not doing so can be severe (I.e. increased risk of suicide, depression, etc). Most of these people are not doing it for attention seeking purposes, but because they honestly feel like they were born with the wrong body.
I also take issue with the priests analogy of a doctor telling someone they are healthy when they are not. That’s not what this is. We are not their doctors telling them that they are not healthy. We are their friends, family, and public that really don’t know anything at all about their situation. If the individual’s psychiatrist tells a minor’s parents to call them by their biological pronoun, so be it. Defer to the doctor. But otherwise, their medical and psychological history is private, and protected by law in most cases. So we can only go with what that person chooses to tell us, and that’s it. It is not up to me to pass any judgment or opinion on how to help them outside of that.
If a cancer patient undergoing chemo says they cannot eat a salad, you do not give it to them anyway, just because it’s common knowledge salads are healthy. There’s a legitimate reason for it, that most people may not be aware of. You have to take their word for it, even if they don’t tell you the details why. This is how we do what is best for the person, and how we actually show that we care.