Sorry, I went on a little bit of a tangent here. TL;DR at the bottom.
I strongly disagree. First, he is focused on her dress being feminine, because their common ideal was for magical girl to be a symbol of both strength and elegance as well, no on looking more feminine himself. It's about his ideals even from before Alice's death. If he was convinced that pants would be much better from the point of security, he would probably design and wear pants as well, and try to convince other companies to change as well, but his goal is to make girls elegant, while she is someone who dresses in sport dress all of the time. Their argument is about preferred aesthetics, not about safety or gender. We can see that she later wears dress that's both elegant and easy to move in and fitting her personality, dress designed for her with his principles in mind.
Whilst this is not a
bad explanation for his behaviour, it is the kind of excuse I would make for this stuff in the past.
Secondly, he never was shown to be in anyway into feminine stuff himself, nor was he in any way concerned about being more feminine even decade later, in current time.
I mean, he does keep wearing dresses, and there's a particular sadness in his eyes which feels familiar. This could be explained by the loss of his sister, but to me it looks like this sadness is still very much present in the flashback in chapter 114. I can't reread the particular chapter in which he first started wearing dresses, but I remember seeing a certain careful joy and recognition.
Third, especially in manga, but also in real life, liking frilly stuff does not really imply trans stuff, any more than girl liking boyish clothes. Tons of characters crossdress just because they think it's cute, and clearly insist it doesn't have anything to with their gender, just like in case of girl liking pants and hating skirts. There are even gender-bending characters, like Ranma, taht are clearly not trans at all. In this situation especially, with strong reason being given for his one-time sudden change, and also seeing that he always wears the same dress, not many different pretty clothes, but only one dress that most reminds him of his sister's, trying to find trans issues is pretty reaching.
Uhm, I haven't seen or read Ranma, but like, the only reason I know it is because of screenshots that trans friends of mine relate to. I don't think that's the best example to give. A character can have lots of trans traits even if the character is not canonically trans. (and like, I'd expect a cis character in a genderswap story to get a severe case of gender dysphoria, because, getting gendered the wrong way is a horror you can only experience - I would not recommend it; someone who does not get gender dysphoria/euphoria with swapped genders would be more like bigender/genderfluid/agender)
Regardless, I am not trying to imply that liking frilly stuff means you're trans! There are tons of cis dudes who like dresses, and I'm not against it. All I was saying, is that this behavior is consistent with the behavior of an egg ("well this is rather eggy") - in particular, past me. I highly doubt the series will see him transition and I'm not arguing that he's inherently trans, just that this might be an okay reading of the character. There can be two good yet conflicting readings of the character (which are both consistent with canon).
My headcanon doesn't need to be the same as your headcanon, and there's nothing wrong with that! Someone being a trans woman is cool, and someone being a femme cis men is also cool. It's not insulting or wrong to suggest that someone might be a trans woman.
We don't really need to make every crossdressing character into egg.
Is this a thing? It feels a bit much to claim I'm doing that here, especially considering I'm not very active on these forums. I understand that for you it might feel that way if it happens a lot, but clearly that's not what I'm doing here. That initial comment was literally my second comment on these forums. I don't tend to seek out crossdressing manga, because I'm not a crossdresser (but only recently realised that they put some trans manga under the crossdressing tag, ugh, I'm not a crossdresser). (I'm here for the magical girls).
But even if it is a thing, is it wrong for people to ask whether crossdressers might be trans? Obviously, if a crossdresser in real life consistently gets asked whether they're trans, that sucks (and so does the reverse). But, in media analysis it's not an uninteresting angle, because the character isn't here to listen to the analysis. I don't think I do do that, but if you do at least consider that of every crossdressing character, is that a bad thing? Obviously, it would be bad if there were no crossdressing characters left in manga, but there's very little trans characters/crossdressers in general.
I also disagree with "weird and inconsistent rationales" part. It's kinda weird, but not really that weird considering the huge shock both of them got from Alice's death, especially with them having good reason to feel responsible for it, and it's not really inconsistent at all, as I've already explained, he definitely wouldn't endanger his staff by insisting on impractical battle gear, as we can see from Koshigaya's practical yet pretty dress. Trying to be similar to your dead sibling is not uncommon in manga, for example in "Vanitas no Carte" there is woman that cut her hair short and dresses like a man (in aristocratic society, which is as weird as man wearing dress nowadays) after blaming herself for brother's death.
I've not read that manga, but also historically there's been trans men doing that which you describe from Vanitas no Carte.
Anyway, I still think it's a bit weird to act like this, but yeah, you're probably right that it's not that weird.
Sorry for writing such a long post I wanted to address your thoughts completely.
TL;DR: I don't think it's bad to apply a trans lens to him because it's not bad to do so in general and because I recognize some things from him. And I also don't think you have to apply a trans lens to him, it's cool to just consider him a crossdresser - it's okay to get whatever interpretation you want.