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I'm not deeply familiar with the fandom discourse around Fata Morgana, so I can't comment on people mislabeling him as trans.
As for the Steam tag, as far as I can tell, Steam only has one tag ("LGBTQ+") to highlight non-straight and/or non-cis elements in games, instead of a bunch of different tags for different types of identities / orientations. I'm pretty sure this tag can be seen as a stand-in for "LGBTQIA+" - the "I" in which stands for "Intersex."
Don't worry, nobody in the fandom ever thought he was trans, lol. That's just a tag
Hohoho.... you didn't see Twitter or YouTube... a saw A LOT of pro LGBT people supporting Michel as a transgender charater...
transgender
adjective
trans·gen·der tran(t)s-ˈjen-dər
tranz-
Synonyms of transgender
: of, relating to, or being a person whose gender identity differs from the sex the person had or was identified as having at birth
especially : of, relating to, or being a person whose gender identity is opposite the sex the person had or was identified as having at birth
There's nothing about right or wrong bodies. What matters is someone's actual gender identity vs how they were identified by the society. Michel was identified as a girl but is a boy. Thus, transgender.