Apologies for the late reply, had some stuff come up.
Sorry to get you excited, but I was referring to the Lombardi-Nash translations, not the original texts. I wish I was fluent enough in German to read the sources directly. When I ever get to that point, top of my reading list would be Das Dritte Geschlecht, which is a modern reprinting of a magazine of the same name that ran for 5 issues in the later Weimar years. It consists of a lot of work written by trans people themselves, as well as medical experts in the field, plus a variety of photographs.
You bring up some really interesting questions about the text itself that I haven't thought about before. I haven't read Rockhill's book but I have listened to a couple of his talks about it, so I'm vaguely familiar with his thesis, and applying a similar lens towards the topic of trans medicine is very interesting. Based on my scattered reading, my guess would be that the answer is tied to the John Hopkins clique of physicians who eventually ended up inventing gender to "save binary sex from conceptual collapse". Embarrassingly, I have not finished it, but Histories of the Transgender Child is an excellent resource on that group and their work. The preface in the first Lombardi-Nash volume mentions that anti-German sentiment surrounding the First World War played a role in limiting Hirschfeld's reach outside the German speaking world. That, plus the infamous destruction of the Institute along with the fact that the vast majority of material (particularly the 'informal' stuff like patient notes) was never published abroad, meant that his work was buried under the other monumental historical events of the time. It's been a long while since I read it but I remember Heike Bauer mentioning in The Hirschfeld Archives: Violence, Death, and Modern Queer Culture that a lot of his surviving work was only unearthed recently.
Thank you for the interesting lines of inquiry, it's given me a lot to think about and an interesting direction in which to take my research, other than just reading Hirschfeld for the sake of it. I'd like to be able to bring a Marxist/communist lens to all this, but I am hesitant to even call myself those things because I am guilty of the classic sin of Not Doing The Fucking Reading. You're right though, his politics are generally glossed over from what I've read. Heike Bauer makes mention of some of the topics he was curiously silent about, but the only indication of his actual politics I've come across in my reading was an off hand mention that the Institute would occasionally house members of the Comintern who were staying in/passing through Berlin.
Anyway, not sure how to conclude, but thanks for chatting with me about this, it's given me a lot to think about! 