“They” has traditionally been used for unknown gender, whereas “it” is for an item that you know has no gender.
For example, “I heard that there was a strange teacher at the neighbouring school: they ride a unicycle to work”. “They” is used because the speaker doesn’t know what gender the teacher is, they just know that the person in question is a teacher. If they knew it was a woman, they would say “She rides a unicycle to work”.
On the other hand, “The table is broken. It has only two legs” uses “it” because a table in English has no gender. It doesn’t have unknown gender, it has no gender.
Since a person has an intrinsic gender, it is considered dehumanising to refer to them an an item with no gender, because in English that is reserved for non-human objects.
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