It's just difficult to parse a writing where the same pronoun is used throughout for multiple different entities. This exact same issue commonly crops up with "he", "she", and "it" as well.
The solution in these instances is to limit usage of the pronoun altogether and just use the noun directly wherever there may be any ambiguity.
For example, don't say, "Julia wrecked Sarah's car; she was pissed!" The "she" here should just be replaced with "Sarah" or "Julia", even if it sounds a little odd to use the same noun twice in short succession.
If Sarah goes by ‘they’, “They was pissed” sounds wrong and most people would actually speak “they were pissed”… but now it is a three way ambiguity: Julia pissed, Sarah pissed, both pissed.
This feels like an example of a bigger failure mode, but I can’t nail it down. Something like ‘groups are resistant to short term change even if it is a clear Pareto improvement’
The history of pronouns for female, male, neuter, and none-of-above tracks with cultural notions. English's pronouns will mosdef evolve to accommodate the new norms. We're merely in a transitional phase.