a couple points:

• by this logic it is psychiatrists who get to decide who is or is not trans, not trans people themselves
• the in-universe context does not erase a male actor standing in front of a mirror in a dress saying "would you fuck me? i'd fuck me."
• regardless of what the movie or book says buffalo bill is clearly a caricature of a trans woman. it doesn't matter that they say buffalo bill isn't trans, every cis person who watches the movie reads buffalo bill as trans except when they want to argue the movie isn't transphobic
• i can't speak for every trans woman, but i can say with confidence that a whole lot of us were fucked up by this, both because of harassment and because of internalizing the and no amount of "oh actually buffalo bill is cis and just has a fetish" will fix that. in fact, in many cases it makes it worse! transphobes generally think ALL trans woman don't exist and just have a fetish! the idea that cis people are out there trying to get srs and must be stopped, so we need to make double extra sure that everyone who wants gender affirming care is gatekept for months or years until the all-knowing medical community lays down judgement is transphobic

regardless of if it was INTENDED to be transphobic it is undeniably incredibly transphobic, and both incredibly detrimental to public perceptions and damaging to self perception of transfem people