To be clear, I haven't said anything about
my proposed changes. I'm parroting what I understand to be the changes Google actually applied.
That said...
You're missing that some problems are, actually, entirely perceptive. You're right that changing the mirror to hide problems isn't addressing the underlying issue, but sometimes treatment of symptoms is the only available (or possible the most effective) option. Like everything else, it's one tool that can be applied poorly or effectively.
> it would be unfair to simply damage the service for one group to appease the another
This is ineffective as a stand-alone principle. The failure mode is described as "your freedom ends where mine begins" and is clearly visible in the exaggerated (and somewhat contrived) example of "damaging services for murdering to appease those who want to remain un-murdered is good".
Like all principles, this has both extreme-case failure modes (services for murderers) but also fuzzy-case failure modes. If the term for my identity is sexualized, when that identity has nothing to do with sexuality... well, what's fair? Why should group X define the term instead of group Y?
So, for cases where the problem is primarily perceptive (or the symptoms are primarily perceptive), seems reasonable to me to warp the mirror. It's like using glasses: you're already looking through a warped lens, so use a correspondingly warped lens to correct.
My actual point is that systems that incidentally encode biases then let you better examine those biases, and, depending on the situation, do stuff to address them.