Man, if one person has a working set of testicles and another person has a working set of ovaries, we aren't going extinct. You're just getting pissy that a fraction of us don't call it by the "right" name and assume a whole host of social rules that aren't even consistent because of it.
Language has consequences in how people act out their lives. If your version of the language leads to people sterilizing themselves, maybe consider trying some different naming conventions. It's not right vs wrong, words are all made up, none of them are inherently right, but some help make people joyful and prosperous while others make people frustrated and suicidal. Please, stop supporting the latter.
Nothing about it is sexualized unless you think dresses, make-up, and wigs are by definition sexual.
Fashion is much like language. It's all made up by people. There's nothing inherent about any of it. And yet, you can recognize people's roles by what they wear. Uniforms are obvious, you can tell the difference between a doctor and a police officer. Non-uniforms can be equally telling: if you see a teenage boy in America with his pants falling down in the back, you can guess his personality. You see a woman in a big, colorful sweater and blue hair, you can guess what she'll act. People dress in culturally coded ways to indicate things to people. It's never "what's most sexy". I don't know if any man thinks the "little black dress" is the sexiest outfit in the world, and yet women all over the place shove themselves into those sausage casings and go out to clubs because that's the cultural coded attire for "I want men to want to have sex with me". Adding a bowtie to a shirtless man is objectively more clothes, but we all know the bowtie means that he's dressed like a stripper.
It's not just dresses, make-up, and wigs. Have you seen the quantity of sequins on these characters? They are imitating burlesque. They are wearing outfits exaggerated specifically in the ways that are culturally coded to striptease performances. Your questioning why those things should be sexualized, but not questioning why people would want to perform for children in outfits deliberately pulled from sexual adult entertainment.
The concept of asexual gays would probably glitch their brains.
If you used those words as simple descriptors, it's pretty easy. "A man who finds men attractive but doesn't want to have sex". It's when you treat those as categories of human that you can be you cause issues, since you're creating a scenario where one gay man has nothing specific in common with another (the opposite is equally valid, a gay man who finds men to be ugly but still wants to sleep with them), but are both claiming the same specific category of being. If it's words, if its just expressions of preference, it's not a problem to have personal and even contradictory meanings for self-description. When you consider these to be people's core identity and ask everyone to recognize and respect these categories, you can't have malleable, personal definitions. You can't demand people recognize something with no form.
For instance, the picture below is amongst the more risque, and yet is still well within societal norms for women's clothing that children are exposed to in their regular lives on a daily basis.
No, it isn't. You've never seen a woman dressed like that in your regular daily life. I guarantee it.