True Left

"There could also be confusions using 'it', I would assume you were not talking about a person if you referred to an 'it'. Even if you disagree, using they/them is in agreement with more mainstream gender-neutral language and cannot be considered in any way insulting, whereas "it" can be."

There are some who prefer It/Its pronouns for themselves. Some would say that's dehumanizing, but I see that as an opportunity to criticize anthropocentrism. Theoretically if you think of gender as a compass instead of a single spectrum, It/Its could be seen as implicitly neither masculine nor feminine (neotenous), while They/Them could be seen as implicitly both masculine and feminine (androgynous).

I've been contemplating using It/Any pronouns on myself for these and other reasons. But I would still use They/Them for most situations for the reasons you mentioned.

This could also be explored in fiction.