by doing so you would be approving of their deviance and falsehood. I would think you are not allowed to do that for the same reason you can congratulate the kuffars on their holidays, like christmas.
A person is either male or female. That is how Allah created all of us.
Your friend is confused enough as it is. I do no think it is helping him/her to give encouragements and validation to that action of attempting to denying the gender he/she was created with.