I'm very skeptical about some of the attempts to change the German language to be more "gender-neutral" due to a number of reasons, but I feel it's not correct to frame this as a misunderstanding between "genus" and "sexus", as I've now read a number of times.
If people really confused grammatical gender with "the biological concept of sex", then we'd have a lot more arguments about random nouns needing to have feminine gender instead of masculine (there's this famous joke about "die Salzstreuerin"). But that's not really what happens. Nobody seems to care about the table being masculine.
What the argument is mostly about is that we use words that, by themselves, refer to masculine people and pluralise them to denote a possible mixed-gender group. This has everything to do with semantics (and so with how concrete biological/social gender expression is encoded in the words of a language), and isn't really that much concerned with grammatical gender, which after all disappears anyway as a distinctive feature once you're in the plural.