I'd say there is a difference between insults (targeting a specific person) and slurs (targeting a group of people). Insults are generally fine, since they're generally aimed at a specific person for a specific reasons. A slur, aimed at someone based on their race, religion, or some other...
Pragur U is an absolute joke and their lawsuit is nonsense. Google might get successfully sued for something, but it won't be this. Prager already lost essentially this same law suit last year.
Why should a made up thing that doesn't happen or even make sense with half a second of thought inform policy?
If someone is walking around intentionally exposing their genitals it could be prosecuted as indecent exposure (or other crimes, depending on state) no matter whether they're trans or...
I'm not sure either if you two understand how public bathrooms work. Are you just walking into bathrooms and whipping your dick out as soon as you go through the door, or what? Nobody is going to see genitals in a women's bathroom because they're all stalls. Even in men's bathrooms I've never...