I had never though about it before, but the objection seems to be that the name focuses on the genetic essentialist mode of defining gender, which is at best outdated and at worst deliberately exclusionary to women who don't actually have two X chromosomes. (ie, trans women, who were born with male sexual characteristics)

But I don't think the name necessarily excludes, only provides a discussion focus. As in, it could be seen as an admonishment to not be restricted by outmoded definitions. So long as the community itself doesn't hold a TERF mindset, I don't see it as a problem. The justification of the name definitely needs to be changed to better reflect modernity, though.