Outside of some of the typical transphobic shit, I don't disagree that this feels like misdirected outrage. The game has lots of diversity in it and if anything, I thought Lev's character and arc was really well done. The takeaway for me was that he moved on from people that didn't accept him and wanted him dead, to finding a friend who accepted and didn't question his identity (as well as his sister). It's only natural that the scars would refer to Lev as Lily, since their 'beliefs' would never recognize him as a male and having them do so would take away Lev's reasoning for even wanting to leave in the first place. In order to show people being shitty or unaccepting, they kind of have to do... unaccepting and shitty things.
Then again, I say all this as someone who ain't trans, so hearing a tran character called their dead name might trigger stuff and I get that. But at the same time, you have to look at why it's being done and in this case, if anything, it's to build a pretty positive character.