> I'm arguing that it ought not to be a polite lie

A lie is defined in terms of it not being the truth, not in terms of effects on someone. Those effects are entirely irrelevant.

> My understanding is that the worst side-effect of using hormones is infertility, while surgery comes with more risks.

Men getting oestrogens are getting osteoporosis in their 20's and 30's.

> Anyway, it's about trading off mental anguish against possible complications of medical intervention.

It's not even doing that in most cases, because the self-loathing that caused people to look for the "transness" escape hatch turns out to have outside causes and won't go away.