For context, in the movie All is immediately asked if they have a "hot dog or a bun," a "wiener or a vaginer" (later, in a moment where All is whipping the two protagonists, Ben Stiller's character says, "Definitely a hot dog"). The character is also referred to as "herm-self," and is said to have married themselves in Italy.
After the release of the movie's trailer, a petition to boycott the film garnered over 25,000 signatures, saying, "Cumberbatch’s character is clearly portrayed as an over-the-top, cartoonish mockery of androgyne/trans/non-binary individuals." Then, Nylon wrote when reviewing the movie, "How is it okay to not only inaccurately represent a trans* person, not use a trans* actor, but make a joke out of a more than valid identity in the process?"
Well, speaking to his Zoolander 2 costar Penélope Cruz as part of Variety's "Actors on Actors" series, Benedict said, “There was a lot of contention around the role, understandably now."
“And I think in this era, my role would never be performed by anybody other than a trans actor," he continued. "But I remember at the time not thinking of it necessarily in that regard, and it being more about two dinosaurs, two heteronormative clichés not understanding this new diverse world. But it backfired a little bit."
Penélope, on the other hand, responded, “It was funny, what you did."
Though it’s unclear if All’s character was meant to represent someone who identified as nonbinary, trans, or both, casting cisgender actors in trans roles has been widely criticized. It can reinforce the idea that trans people are just cis people in disguise — a harmful stereotype, which has been argued by writer Jen Richards, contributes directly to violence against trans people. There's also a history in Hollywood of cishet actors receiving more acclaim for playing LGBTQ roles than actual LGBTQ actors — take this year's SAG Award nominations, for example.
You can read more from Variety's "Actors on Actors" series here.