Whilst I’m not trans myself, my close friend is, and we’re at that point in friendship where jokes about the other one’s genitals are a fairly normal part of our humour. Let’s see if I can explain it.

Often she’ll call what she has in her pants her cunt or her twat. These are not anatomical terms specifically, they’re just slang for a woman’s genitals. She doesn’t pretend she doesn’t have a penis, when it’s necessary to acknowledge that, for example if talking to a doctor she’d refer to her penis. However, she usually uses female slang words for genitals. Like men usually refer to their “dick” or “cock” instead of saying “penis” or “phallus”, she’ll refer to her “cunt” when it’s appropriate to use slang. For example I might say to her “I swear to god if you call me that again I’ll kick you in the cunt so hard you see stars”, despite knowing that she does not have a vagina.

It’s not that she’s referring to a penis as a vagina in the sense that she’s pretending it’s an anatomically correct vagina, it’s just that when it’s appropriate to use slang to describe the genitals she uses female slang, because at the end of the day she’s a woman and it makes her feel less dysphoric.