The punishment is draconian, but the principle of it actually makes a lot of sense. This isn't aimed at random people. This specifically for caregivers. People in nursing homes and care facilities are at the complete mercy of their caregivers, and abuse of the elderly and disabled by paid caregivers is more common than you'd think. The people in nursing homes have limited power and resources and are sometimes completely unable to speak for themselves, so potential abusers have little to dissuade them from mistreating their wards. That's where the state comes in, to offer protection for those who have no one else. Repeatedly, intentionally misgendering a person can be a form of psychological abuse. They aren't policing "oops, I made a mistake by calling this person 'he' instead of 'she' a few times, my bad!" This is for caregivers who intentionally, maliciously insist that the people whose lives they pretty much control are something that they're not. Imagine being a 94 years old man and having the same nurse who feeds you, bathes you, administers medications, wheels you around, and changes your catheter every day, insist that your name is "Dolores" and you're a woman and corrects you when you protest. Sure, you'd be angry, but you have no real power to stop her, and that feeling of powerlessness grates on you, grinding down your psyche. Making a person feel powerless is a classic form of psychological abuse. Caregivers can't call their black patients the n-word and make racist jokes, they can't call their gay patients "fags" and mock their mannerisms, and they can't call their trans patients by their dead names and insist their gender is the same as the one assigned at birth, because constantly being told that you're inferior or damaged by the person who cares for you can really fuck with your head.