I’m going to try to be as logical as I can with this.

Otherkin is not a legitimate identity akin to gender or sexuality identities because it does not have a tangible quality or a cultural context to it that can be categorized as such.
There is anti-otherkin rhetoric that they are just “crazy.” Well maybe some do need medical treatment, but for the most part, I don’t see it as a mental problem. Rather, I see identifying as otherkin as a way that people try to categorize and explain and pinpoint differences that they feel within themselves, and find a community to share those experiences. However, I theorize that the differences they feel have more to do with the innate personality differences in individuals rather than a spiritual one that disconnects them from “humans.”
I also feel uncomfortable with taking otherkin for their word because their definitions of what it means to be a certain animal or mythological creature comes from an entirely human-based understanding that may not match up with the desired “identity.” Like let’s say someone thinks they are a wolf, and says that their love of the moon is proof of that. However, the relationship between wolves and the moon are nonexistent; it just come from lore and myth and false “knowledge.” It would make me believe that the spirituality they feel is more fabricated because it does not come from an innate understanding of what it “feels” to be a wolf, but how humans are brought up to think of wolves. That’s just a small example, but my point is that there is already a disconnect between the human perception of creatures and animals, and the actuality of being such creature and animal that demonstrates it is more of a made-up nature.
Also, otherkin are not oppressed in any way for being otherkin. The very concept of otherkin barely exists outside the internet and there is nil institutional power that could warrant any connection to “oppression.”
However, despite all that, I don’t think that people believing they are wolves or dragons or fairies or whatever is a big deal that warrants any kind of bullying really. I don’t understand them entirely, but I don’t think it’s okay to be douches to otherkin.