As well as being a double-edged sword, I see it a bit as a six in one and half a dozen in the other.
There are two examples that come to me, Neighbours and an advertisement for Simpson (owned by Electrolux) appliances. Neighbours had the first gay male character (they'd had a female played by Brigette Neval) of Chris Pappas, played by James Mason (no, not Rotten Tomatoes actor) who was born to an Anglo-Australian father and a Swedish mother, and Mason was both heterosexual in real life and was an Anglo-Swedish person playing a Greek character. On the positive side, it counteracted the Simpson advertisement, where a woman takes her new neighbour a cake as a welcoming present, only to find that he is bulking himself up and has all the stereotypical camp mannerisms of a gay man.
I even remember a gay man telling me that people would automatically assume that he was gay because he had short hair, a goatee beard and an earring, and his response was, "I only get my hair cropped short because I'm receding, and I don't want to comb over bald spots." I have to admit, I'm the same, and crop my hair fairly short because, yes, I'm receding, but also because I have curly hair that grows out and up and makes me look like I've got a head the shape of the old Adidas logo. If a person wants to grow a goatee beard, that's their business, but I, personally don't like them. I shave every second day because I don't like having facial hair and I find it uncomfortable and itchy, and my facial hair is quite patchy, so if I tried to grow a beard, I would look like I had stuck bits of carpet to my face.
As much as I agree about true representation, I also believe that true representation is avoiding stereotyping, negative or positive. We need to remember that there are gay men who are in typically male dominated areas, like automotive mechanics, who do not present in the stereotypical way, just like there are lesbians who do not have their hair cropped short, wear muscle tops that reveal tattooed arms; they can be quite feminine.
And not all transwomen or transmen present in the same way, and that there is a difference between gender orientation and sexual orientation.
Another point that goes towards six in one and half a dozen in the other, I remember from watching the spoiler alert for a program about disgraced British-born Australian tycoon, Allan Bond. My mother said that the man could not expect to gain much work after that. My response was, "But many actors see such roles as a challenge." The chance to play an LGBTIQA character for a cis-het actor is as great a chance to expand their repertoire as it can be for someone who is kind and gentle in real life to play a ruthless character. The latter is, however, a reason why I will never be able to make it as an actor. Aside from the fact that I didn't start making TV commercials when I was about ten (I remember a woman telling my mother that I should have been making them as there weren't many good looking boys around (my ex-girlfriend who told me I had a face that only a mother could love can suck on that)), my drama teacher told me I had little aptitude to performance work and poor inflection, and I find it hard to play someone so different to myself.