A friend of mine (female) did the same thing recently.
I've only talked via Zoom since this happened, and not one on one, always in groups, since she made this announcement, so I don't have much insight into what's going on with their life. (She has requested the use of "they/them". I don't know if she is actually declaring herself to be transgender, or non-gender. Linguistically, "they/them" is just incredibly awkward.)
I don't feel like a jerk at all. I thought of her as a woman. I still think of her as a woman. I'll do my best to go along with her new declaration of identity. It's not likely that I'll ever have to behave any differently around her, anyway. It's not like I was trying to start some romance with her.
However, there are still issues. If she tries to shower with the men, I'll think she is a fool.