Frankly, it can be anything from primping, to gossip, to adjusting underwear, to language, to discussing "female" problems. Embarrassment varies from person to person and I think women ought to have the right to assume WYSIWYG. Deception is unfair in any situation but especially in an arena where people have a fair expectation of privacy.
I will readily admit that I tremendously disagree with the right of people to force others to adapt to their transgender desires. If transgender dressing (as opposed to operations actually changing the physique) is a compulsion, then it needs to be addressed through serious counseling. If it is not a compulsion, then it is a fetish and needs to be expressed as most others express their fetishes, in the privacy of their homes or other private places. I consider it no more appropriate for a man to dress as a woman at work (or vice versa) than it is for a man or woman to dress in S&M gear at work. There is a place for everything and public isn't the place to dress as the opposite sex, except maybe at Halloween, particularly where it is intended to fool those around them as to their actual gender.
I don't support cowtowing to Muslim demands and I don't suport dhimmitude to transgenders.