I think personally what happened was the trans community was co-opted by ideologues. It was then spread by people who subscribe to the ideology and bought into the sophistry.
It is a kind of post-modern, social constructionist idea of gender. When you introduce the idea that there is no truth other than what the current power structures or dominant culture propagates, it is inevitable it would be taken to pure levels of absurdity. A good example would be 'genderfluidity'. The idea that you can change your gender on a whim, depending on the weather that day. Whats more, that people should respect that. It is apparent that it suits feminist ideas about gender. It is argued within feminst theory that gender, and even biological sex are entirely social constructs. Of course a big element of gender is a social construct, but idea that behaviour is purely down to nurture and doesn't have a biological component is a seriously contested one.
I remember watching a video on youtube where they were discussing the eradication of the male gender (lol). They didn't mean it literally, like male genocide or anything, what thet were talking about was more the idea of 'maleness' (toxic masculinity, etc). The logic behind it was that by eradicating or undermining ideas about masculinity or the male gender you weaken the patriarchy. One of the ways of undermining it is to introduce many diferent gender types.
In short: it is just an ideological tool that is convenient to feminist ideas about gender and the patriarchy.