I don't think it's a distorted reality, except for the surge at middle-school age, who do it because it's now a thing.
I don't doubt many FEEL they're the wrong actual gender when they're young, but if you can't be trusted to drive or adopt a kid when you're young, there's no reason to intervene in regards to this until they're 16-18.
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Using someone's pronouns is a matter of etiquette. If you know them and respect them, guess what, you'll use their pronouns. And also guess what - you'll use their pronouns if they match how they look. Pronoun use is rarely a conscious matter, it's whatever comes out in the flow of your speech. If you've known a guy for 15 years and he's a she now, you're going to say "he" because that's what he is in your mind. If it's someone you've recently met and they look like a she, then you'll use she.
The pronoun thing is only an issue when the trans person is looking to get offended when there is no offense OR when someone is deliberately being a jerk about it. The rest of the time, it's accurate or innocently inaccurate.