Theo - True. Brassard recommends against it, for example; it makes the scraping/clearing efforts he makes during surgery less effective and increases the chances of regrowth afterward. He does say that if someone really wants it done, to make sure there's at least a year without regrowth after electrolysis, before GRS.
(From his informational packet : "Hair removal on external genitals before male to female reassignment surgery is debatable. Hair bearing skin on the penis shaft base with the one step technique stays outside on the neo vulva. The skin that will become the internal living of the new female genital is the rest of the penis skin, scrotal skin and a small « perineal flap » (a one square inch of skin that is located one side above the anal margin on the midline). If you want a perfect hairfree vagina you need to be sure that no regrowth of hair has occured on the area for at least one year after you have finished electrolysis on laser. Even then this does not garant that no hair will ever grow. The hair roots are either killed or weakened by electrolysis or laser. Those only weakered regrow. During surgery hair roots are killed with the cauthery on the scrotal skin that is used as a graft ( not on the « perineal flap » ) During surgery the hair roots that were weakered are less visible because they are much smaller than those found untreated areas and could be missed by the surgeon and regrow later. For this reason, in our experience expeditive laser or electrolysis treatments are worse than not having hair removal at all. In fact, we can get most hair roots during surgery if they were not weakened. Regrowth after our surgery is possible but very sparse. If you want no regrowth at all you will have to face hours of painstaking hair removal and a one year nonegrowth period. At this time we do not feel that hair removal is indicated.")