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First of all, yes, I think some people find it controversial to use the term "genocide" to refer to what's happening to trans people. Part of the debate about the term "genocide" is whether it can apply to non-ethnic groups, for example. I would argue the spirit of the term does apply to any group, but some people disagree. I'm not sure why it's so important for the term to be limited to ethnicity, I tend to think these arguments are not in the spirit of validating or recognizing very real oppression and violence intended to completely eliminate a certain group.

The motivation to use the term "genocide" is that the anti-trans movement has explicitly stated as their goal the total erasure of trans people:

https://www.rollingstone.com/politics/politics-news/cpac-speaker-transgender-people-eradicated-1234690924/

During his speech on Saturday, Knowles told the crowd, “For the good of society … transgenderism must be eradicated from public life entirely — the whole preposterous ideology, at every level.”

Knowles subsequently claimed that “eradicating” “transgenderism” is not a call for eradicating transgender people and demanded retractions from numerous publications, including Rolling Stone.

Erin Reed, a transgender rights activist and writer, tells Rolling Stone that it’s an absurd distinction. There is no difference between a ban on “transgenderism” and an attack on transgender people, she says: “They are one and the same, and there’s no separation between them.”

https://www.rollingstone.com/politics/politics-news/matt-walsh-supreme-court-erase-trans-ideology-earth-1235192666/

“We are not gonna rest until every child is protected, until trans ideology is entirely erased from the earth. That’s what we’re fighting for, and we will not stop until we achieve it,” he said.

Specifically, the Lemkin Institute for Genocide Prevention has described the anti-trans movement as genocidal:

https://www.lemkininstitute.com/red-flag-alerts/red-flag-alert-for-the-anti-trans-agenda-of-the-trump-administration-in-the-united-states

The Lemkin Institute for Genocide Prevention and Human Security condemns the anti-trans agenda of the second Trump Administration and warns Americans that the recent spate of executive orders, which are in line with a genocidal process against the transgender community that has been emerging in the United States for over a decade, are meant to pave the way for greater state repression against all individuals and other groups in the future.

...

The Lemkin Institute believes that current anti-trans hysteria within the government is meant to serve three purposes within a wider genocidal process. First, the Executive Orders constitute the paper marginalization and ‘paper persecution’ of an identity group that has recently gained rights and greater acceptance in order to lock in evangelical support for the Trump administration. Second, the executive orders create a fictitious ‘cosmic enemy’ that will justify radicalization of government in general, leading to ever-more power for the executive branch; and third, the executive orders, over time, aim to normalize the destruction of identity groups by desensitizing the public to state-sponsored persecution of people based solely on their identities.

Taken together, the Trump Administration’s executive orders related to trans people would effectively destroy, if fully implemented, trans people as a group, in whole, to summarize the text of the Genocide Convention. The orders begin the process of removing a trans presence from collective life and preventing trans people from existing as themselves, forcing them back into invisibility and isolation. This attack on trans identity is reminiscent in the US context of the Native American Boarding Schools, where the goal was to “kill the Indian … and save the man.” Not only would the effort to deprive trans Americans of gender affirming care constitute a form of torture (and medical malpractice) with terrible mental health repercussions, but also such measures are a common phase in genocidal processes and generally lead to ever greater persecution.

Trans people in Florida prisons are being forcefully detransitioned and forced into pseudo-science conversion "therapy", I don't think it's hyperbolic at this point in time to say the intentions of the anti-trans movement are genocidal, and I think the movement is largely succeeding in their goals.

So far necessary medical care has been denied to trans youth in many states, and the U.S. Supreme Court recently ruled that discrimination against people on the basis of "gender dysphoria" is legal. We already have data that the ban of gender affirming care (and in some cases, forcing physicians to detransition trans youth) has significantly increased the rate of suicide attempts among those trans youth.

We are also seeing tools used in previous genocides, such as "social death" where the concept of being trans is eliminated from the law and thus on a social and legal level trans people cannot "exist". Laws in some states have already achieved this (which results in trans people never being able to fix their birth certificates or update their legal documents, for example), and now the federal government is operating under executive orders that establish the same (making it impossible for trans people to have accurate passports or federal documents, for example - but the policies impact much more, including forcing male TSA agents to pat down trans women and vice versa).

So the methods and goals are all genocidal, the only problem is that trans people as a group are not a national or ethnic group, so this would fail a narrow definition of genocide that way.