I would say at no point does it become damaging. At least no more so then any normal teasing that any child will get. I think parents go too far in trying to protect their children from imagined risks, which isn't good, as I know more than a few people who have serious mental problems due to helicopter parenting.
Then again I am biased as I love my long hair, and I'd like to think that being transgendered has nothing to do with that. And when I was a young child my parents used to force me to cut my hair, and it was rather damaging to me. I still get angry thinking about it. luckily, I have done nothing more than trimming my hair since I was 13 (which is incidentally the last time I lived with my parents), and I couldn't be happier about that.