When a psychiatrist calls a man mentally ill, he seeks not to insult him any more than when a heart surgeon tells a man he is in need of heart surgery, but when the common man says “You're mentally.”, that is seldom earnest advice or concern, but rather a cheap insult, and consequently there is a cultural push to declassify many mental illnesses as such, all which would accomplish is that, say, health insurance coverage would no longer cover hormonal replacement therapy and genital confirmation surgeries, two effective treatments against the illness of gender dysphoria.
The psychiatric consensus is indeed that gender dysphoria, a dehabilitating condition which affect's a man's functioning in society is a mental illness, as well as having various treatments therefore, — but since “mental illness” has become an insult in common parlance, one must be quite careful as to how to phrase that nowadays.
I have a low opinion of the man who feels that “mental illness” is an insult, it speaks of his own views of the mentally ill and how he probably treats them as lepers and pariahs.