How would you feel if this was your son or daughter?

I was just discussing things with my sister in law and her reaction was not really what I expected. So I figured I would ask elsewhere! My sister announced to our family last night during dinner that her son Ryan expressed strong feelings to become a girl to her and my brother in law. He is 16 and from the time he was a baby, we always knew he was different. He used to take his clothes off and dress in his sisters clothes. He has a fraternal twin sister named ReAnna and even she sees him as her sister. We kind of figured it would be coming along any day now but we never expected it to go this way. Ryan's parents are very supportive and are working with a doctor to go about the transition in a safe and constructive way. As a family, we all support him and will be here throughtout the process to do what we can. Ryan is now our little Rachelle :) However, my sister in law said there is no way she would support the situation and would seek shelter for him elsewhere if he were her son. She also said that if he chose to pursue his wish, she would cut off contact with him. I asked if this will affect our family's relationships and she said that no it would not but that she would be more cautious about her children (ages 4 and 7). I understand her feelings but do not feel the same way. If your son or daughter came to you with such feelings, how would you feel and what would you do?