Yes, she's missing all that context and nuance. Sometimes clothing can be described as a "costume" — but that word is loaded and often unfair, since people have to wear something, right? Are my pants a "costume" if I buy them on a rack of "men's pants" or "women's pants," and does the same pair of pants stop being a costume if I buy them on the "unisex" rack (i.e., due to the clothing manufacturers' or retailer's intention or my intention as a consumer), or does it depend if they're tight or baggy on my body, or does it depend how strangers read me as looking more like a man or a woman in this particular pair of pants, and what if the strangers disagree in their assessments of me? Am I in a costume if no one agrees what my costume is?

Similarly, is my body a "costume"? Why? Because I took hormones? What if I take hormones for motivations that aren't primarily transgender? If the concept of transgender is invalid, how can that concept turn my body into a costume?