Keep in mind that I'm not attacking you personally, your question seems genuine, so I'll try to answer as clearly as I can.
But yeah, precisely. "Certain things". I'm sure you don't mean it as "those disgusting things", but that's how some people can understand it. Again, I'm advocating for LGBT people here, because IMO, people can go around as reindeers, piggys or frogs, I couldn't care less. Once you run a piece of content once, you don't need to immerse yourself, and even then, it's just a small effort to ignore people that dress outside of the lore.
Transgender people and crossdressing people can't dress that way IRL, because they get people looking at them with hate, fear, disgust, or a mix of these. Let's be clear, they don't dress that way for others, they dress that way for themselves, but they want people to recognize them for who they are, so it is important for them to be that way in public. Precisely because all they get is hate, right now. They want a world where they can dress and act freely. Many people are not even there, they are still fearful of people's reactions, but that same fear doesn't help with their identification. They are still confused, they feel like they're not living their lives, but the one of someone that was "designed" by this society, someone they can only see as an outsider to them. So, most of the times, they get depression.
Some may feel the need to take extra steps before making their coming out (if they do one, nothing mandatory), and crossdressing may be that extra step. And when that's the case, they are actually quite fearful as well. As discussed earlier, their character is not them, but as MMORPGs are social, the reaction to their avatar, when this very avatar is an expression of their true self, can hurt pretty bad. So when they leave their comfort zone, and dress their avatar in a way they would like to dress, and they got the feeling that people don't even want to aknowledge them there, it can be devastating.
Granted, most of the time, if that feature happens to be implemented, they won't know. But they will know that some people can choose to not see them, because they despise them for who they are before they even get to know them... So basically the same thing that happens IRL. So, video games, internet, that are a safe place for most of us from the IRL stress, become just an extension of IRL, where you face the same adversity.
So that's why expressing yourself is so important.
Meanwhile, when you're incomfortable near crossdressers, all you have to do is behave like everything is normal. I'm not saying "LGBT should be cherished by everyone". We all have issues, LGBT or not, we all may need a safeplace. And we should all act together to preserve that safe space.
I know how disturbing it might feel to be around crossdressers, especially when you're coming from traditional families and everything, I've been there. But it won't ever be as bad as the mental distress of someone that suffers from dysphoria and that has to lie every second of their life to not be hated.