Post #12 described the situation of your wife's friend and who might use the ladies loo.
When I sought clarification of what scenario bothered them the loo became a changing room which may be a different scenario to a bog standard office loo.
It would also be helpful to know exactly what the situation of the 'man' wearing women's clothes is. If they're fully transitioned, as the person I mentioned upthread was, then he friends may not even notice the difference.
If, at the other extreme, he's a hairy arXed bearded bloke going in there for kicks then obviously action is needed.
It's also worth pointing out that if the 'man' has a Gender Recognition Certificate in their new gender then offences can be committed if information is disclosed:
https://www.legislation.gov.uk/ukpga/2004/7/section/22