The asterisk was first used by truscum as a way to begrudgingly include non-binary identities. Like “ok, but you can’t call yourself trans”. Trans is already an umbrella term.

It also was being used by cis people that still excluded non binary identities like “are you trans* girl or boy?”

Cis people began correcting trans people over its usage (it did not even need to be used in the first place!).

There’s trans misogyny with it too, people would say “trans* woman” and “trans* misogyny” as a way to say they weren’t real women.

So basically : trans is an umbrella term but truscum didn’t want non-binary identities to use it, and t became so convoluted and watered down it became cissexist to use it.