There are two questions looped into one here:
- Why, within the text, would Merion react this way?
- Why was the story written with this scene present?
In this case, these two have distinct answers, because the motivation for writing it doesn't simply amount to "that's what Merion would do." So it's important to start there - why was this passage added?
The exchange is operative on this line:
It was an odd thing to fall in love with somebody's ferocious vulnerability, but that was the position Jeremy found himself in.
This snippet of a scene is written specifically so that line is emphasized. In order for that thought to have such an impact as it's written, it has to proceed a moment where Merion exposes some kind of vulnerability, which means one of those moments has to be written in just before it. This is pretty early in the story, as well, so it's intended to highlight an important point of their relationship dynamic.
In my opinion, this is a crude way of writing this in, but it's definitely functional. The scene feels abrupt, and for that reason, the cause of Merion's irritation becomes obfuscated. I also don't see evidence that this snippet was intended to convey exactly why Merion responds this way, beyond Jeremy's vague conception of vulnerability, though, which does make it stick out in an odd way.
Which is a nice hook to the first question - why, within the text, would Merion react this way?
To tell you the truth, there's no real way to know what the author had in mind, because the passage is so short. The most I can really say on this point is that I can empathize with the character's frustration. I have had similar experiences in the past. I don't have the same identity as this character, but it's similar enough.
I have to be very careful about what I say here, and please be careful as well, for two reasons. First, because my emotional experience is one experience, and I can only speak from what I know, and definitely not for all NB-identified people. And second, because all things equal, if it does matter to you, in my experience it's better to be open and ask than it is to assume, and I want to make that pointedly clear up front.
But, the frustration with being asked repeatedly how you identify is... also real. While I'd probably put Merion's response at "not constructive and not deserved," I'd also add on a hefty, "but it's still understandable." That question, asked out of the blue, can feel like (and mean) a lot of things it's not intended to. Just a couple reasons I'd identify...
The fact that the question was asked at all means that, well, it does matter to the asker. Especially if it's the first time we've met (as is in-context for the story), it means they're not just going to treat me differently, but are intending to treat me differently, depending on which one of the two Acceptable Options I pick for them. That's a really uncomfortable position to be in.
And on top of that, it can be tiring. Being asked persistently about this leads to a feeling where, well, I really wish the answer just didn't matter (see above).
Both these reasons are why I present cis at the cost of what I guess would be unexplored self-expression.
All this to say, especially when asked at the wrong time, this question can really cause people to bristle internally. Merion being written this way... reflects that frustration, at least for me. But I would have liked to see the author describe it in a bit more detail, because as it's written, it's just hard to understand.