Transgender and gender diverse (TGD) Australians experience high unemployment rates and workplace discrimination based on gender identity, despite protections under federal law. There is, however, limited research on the specific experiences and perceptions of TGD people in the Australian STEM workplace. To investigate young adults’ perceptions of TGD people in STEM, we conducted a series of simulated, semi-structured interviews in virtual reality, during which cisgender participants (N = 81) embodied transgender or cisgender virtual avatars and interacted with a transgender virtual interviewer. Our thematic analysis explores patterns of meaning across participant responses regarding popularised STEM workplace policies. Given the Australian socio-political environment, identified themes suggest different levels of engagement with TGD inclusion, highlighting the influence of public discourse on acknowledgment of TGD rights and resistance to changing a cisgender-heteronormative status quo. We classify achievements, challenges, and areas for intervention that highlight gaps between symbolic progress and genuine inclusion. Tokenistic actions appear progressive but fail to address systemic inequities, while informed inclusion requires cultural shifts toward challenging gender essentialism and embracing TGD lived experiences. By committing to meso-level institutional initiatives and consulting on macro-level societal policies, STEM stakeholders can establish standards for progress and improve TGD inclusion in the STEM workplace.