Once again, whenever Morrissey has referenced drag queens or anything of the like, it was always in the old British sense of absurdist, yet witty humour, such as Mrs. Shufflewick and David Hoyle (Divine David, who appeared in his Spent the Day In Bed video). This lineage of British drag is very much about poking fun at stereotypes about women, this is not them claiming to be women. It is done in humour, like when Boz would dress in drag in some shows around 2012. This is much more radical, in my opinion, than the modern American-based drag movement which is more about body positivity, being who you want to be, etc.
That being said, I agree that Morrissey has nothing against people being who they want to be. Just as gender critical thinkers don't either. It's about when they try to push their ideology and force themselves into women's spaces where they are not welcome. This is why he recently spoke about the cancel vultures pecking away at Rowling and Greer. I did not think this was controversial. Morrissey is all for people expressing themselves how they see fit. No one is disagreeing with this. however, it is naive to think that this is what the modern "queer" or transgender movement is about. They are making false biological claims and using that as a basis to access women's services and there is no proof out there that morrissey approves of this. In fact, the evidence leads us in the opposite direction with all the sources I referenced in this thread from the feminist writers he's interested in to his recent defence of Rowling and Greer being cancelled.