the trans characters were definitely there for a joke by shrek 3, but in 2 it feels different because of the overarching queer themes of the plot. alternatively, my standards for queer representation are probably through the floor, because shrek 2 was one of the few times (maybe the first?) i had been exposed to the idea of trans people existing as a transfem child
Not Shrek 2 but related, I just watched Puss in Boots 2 and was very amused with how much of a capitalist carricature the bad guy was. The ethical bug on his shoulder even came to the conclusion that he should fight against him instead of searching for the good in him. The characters, each with different motives, decided in unison that this guy not getting his wish was more important than any of their own wishes.