This will be forced feminization I mentioned above. We already have plenty of this stuff, pretty common, maybe just not that extreme.
Your scenario looks pretty interesting as i like crazy people :) but at least for me it is impossible to imagine how do you humiliate anyone into becoming a tranny unless they are crazy already and bullies just capitalize on that craziness.

This actually cloud be pretty interesting story may be even worth making If I will find some time. So I will put it on my long queue of ideas that I would like to do :) Fortunately almost everything is 100% realistic when dealing with mentally unstable people ;)
Although my story woud be about some transfer student whose secret gets exposed in class so that "she" loses her mind and cuts of her dick right in front of everyone then proceeds to have gory sex with bullies to prove that she is a real woman.