> This person is female and I'm not comfortable referring to her as 'it' because females are 'she'
and
> This person is a human being, and 'it' is used to refer to objects. It's demeaning to call a human being 'it' and makes me uncomfortable
The later is, at least imo, much more defensible.
I also feel uncomfortable using "it" as a pronoun, luckily this person seems comfortable with "she/her" as well so we can just use those instead.
You seem eager to reduce this to "just" a pronoun issue, but it's not the same as calling someone "he" or "she", whatever they might prefer.
No one gets to single-handedly (re)define the English language for everyone else. "It" in this usage does not fall in to normal English usage, other than to mock people. That they want to use it nonetheless or whatever reason, that's fine with me. I will always listen to that and do my best to oblige with that within reason. However, radically different meanings for words in common grammatical structures, for me, falls outside of "within reason". Other people may choose different, and that is fine too.
> Who's There?
> It's me, Bill Gates!
> "It" has a pretty clear meaning in English, and it is not as a pronoun for people. Therefore you're not Bill Gates or a person.
Whatever you have to say, say it to my face, and not in third person behind my back.
This isn’t “I don’t want to call her him because he’s a she.” The person you’re replying to has a very valid discomfort with reducing a person to an object’s pronoun. Completely understandable and defensible and beyond the apparent needs of the author.