It definitely is, in the same way that it is an issue in all works of literature–the difficulty here, I think, is that the exoticization and fetishization here is sexualized literally, rather than in broader cultural instances, where the act is merely normalized. However, at least within the MC/TF genre of erotica, it’s very difficult to create a powerful story without this sort of appropriation.
This is because, in the case of these stories, there are only two directions a TF can progress. It can either go–a) from one distinct individual to a second distinct individual, or b) from one individual qua class to an “other” individual qua class. That’s a lot of gibberish with some Latin thrown in, so let me explain, and try to sound like less of a douche. In a pure body swap story, we have two characters, Andy and Bill, and over the course of the story, A and B swap minds, and nothing else–a pure switch. This story then, is about two distinct, defined individuals inhabiting personalities and bodies which are already defined within the story world. This is the only instance of a story fitting into the first category (a) above. Everything else–every other story–falls into the second category.
So, what exactly do mean by individual qua class? [note: read the word qua as “as” and that helps too. It has a slightly more precise meaning I won’t go into, but that gets the idea across.] Well, whenever we talk about stories, say, “I want a jock to turn into a redneck slob,” or “I want a businessman to become a caveman,” or “I want an older middle aged straight guy to become a leather daddy,” or “I want a rich white guy to become a black thug,” we aren’t talking about individuals–we’re talking about classes of individuals defined by a series of shared (and imagined) qualifiers. None of the characters in the story are going to be able to step outside the boundaries of their respective classes–except for at the moment of transformation–where the breaching of that class boundary is presented as an erotic act.
However, none of these classes are actually presented fairly–they are all presented as stereotype–in a sense, we all know what the above stories I summarized will probably look like–and therein lies the problem. Every single one of those classes–racial, class, age, sexual orientation, fetish, and even imaginary ones like ‘cavemen’–come with a built in set of assumptions about what “those people” are like. The vast majority of my stories rely on these common preconceptions, especially within my captions which are very limited in space, for readers to “get” what’s happening, and hopefully I can add a limited twist as I do it. However, that doesn’t change the fact that these characters are simply stand ins for the classes of individuals that they represent, for good or for ill.
So, here’s how I manage it. I try to avoid racial change and racial issues entirely. Unfortunately, that means defaulting to “ whitewashing” my stuff, as much as I hate it. However, if I include a caption of a non-white character, the expectation will be for readers to add in racial expectations, so even if I see a hot pic of a black guy, I tend to self-edit, something I really, really need to stop doing entirely, because that’s a real shit move. Second, I do my best to render the classes I use as cartoonish as possible, because at the end of the day, it’s all fantasy. None of these characters can possibly exist, because they exist as a representation of a class, not as actual characters. It’s hardly a good solution, in fact, it’s not a solution at all really, but that’s the genre, and I enjoy writing it. However, it’s impossible for me to take it the least bit seriously, and I hope no one else does either.