I would think it shouldn't be used in the real world because an 80% guess rate of gender based on name is really terrible compared to other naive approaches, like "list of 1000 most common names by gender".
While I'm not really buying your root argument, this statement is spot on.
Case in point - I'm a man named Lyndsy.
I agree with your above points about the dangers of making guesses on gender. I'm just not well versed in the progressive gender concepts and don't understand the semantics you are arguing for.
I appreciate the point you're trying to make, but it's kind of a straw man argument.