Mario is probably not the example you want to use considering Paper Mario: The Thousand-Year Door featured a transgender character named Vivian that people still hold up as good representation in 2019, just like people still hold up P2: IS. Going from good rep to actively harmful portrayals is enough to call that aspect of the game bad. It's stuff like Mario and Link being allowed to dress femininely that gives Nintendo gets a pass now, if that's what you want to call it. Maybe Nintendo has developed games with homophobic sentiments in the past, but clearly they're not doing that right now.
Breath Of The Wild had a pretty commonly criticized scene with transphobic elements.
https://www.pastemagazine.com/artic...h-of-the-wild-failed-us-when-it-comes-to.html
I could cherry pick this scene and imply the whole game is worth trashing because of it. Or I could acknowledge it as a bad minor part of an otherwise great game, a part that certainly deserves critique, but it's important to understand that basically all media we consume is going to have problematic elements in it. That doesn't mean stop criticizing it. It means you should weigh your own opinions on what makes one too much and the other acceptable.