How come some 10-20% of ONLY Western societies have this issue now? As I said, it is a mental issue.
I’m not sure how true this is. People will freely identify as long as they don’t feel threatened but that hasn’t been the case for most of recorded history. For example, here’s what the Bible says about homosexuality:
If a man has sexual relations with a man as one does with a woman, both of them have done what is detestable. They are to be put to death; their blood will be on their own heads. (Leviticus 20:13)
Many societies are now more liberal and tolerant which is why people feel more safe to share how they actually feel. That includes many Western societies AND some eastern ones like Thailand for example: Why are there so many ladyboys in Thailand?
But even nowadays, not all societies are tolerant of trans/gay people. Some even go as far as public executions: The Islamic State’s Views on Homosexuality
To be honest, I had been thinking about this issue myself as it wasn’t something I was used to in my country Nepal, which is still intolerant. I knew that such people exist but they often hid themselves as many only show up past midnight in regional city areas. It wasn’t until I moved to USA for college that I saw many LGBTs freely expressing themselves. Mental Health America succinctly states that LGBT is not a mental health issue, even though they’re prone to mental health problems: LGBTQ+ Communities and Mental Health
Many researchers argue that gender is likely a neurochemical phenomenon that is different from the biological sex which is a chromosomal phenomenon (see for example, Neurobiology of gender identity and sexual orientation). From the Dhamma, I have learnt that the gandhabba can undergo drastic changes even while inside the physical body. So even if one had a purisa gati at conception (hence, pulled into a zygote with XY chromosome leading to a male physical body), there could be (hidden) underlying causes that can surface into the (re)cultivation of itthi gati leading to female tendencies and behavior. Some appear to have a mixture of these qualities leading to them identifying as non-binary, etc.
But if one is a dedicated Dhamma practitioner, I think it is reasonable to say that they will worry less about their gender identity (and sexual orientation). When one removes kama raga, it becomes irrelevant anyway. And to my knowledge, Buddha neither condoned nor commended transgenders so perhaps it is not something to worry about but it is good to be informed indeed, especially in our contemporary world.