Does that literally means use she and they in each appropriate context? I've always interpreted that as meaning they're ok with one set of gendered pronouns and/or neutral pronouns, not that you're expected to contort pronoun use to neutral only in specific cases.

Yeah, but it's she/they and not she/them. No mixing.

Context dependent gender also makes a lot of sense to me. Call me masculine if my sex is important to you. Wiggles eyebrows.