One has to laugh at official concerns in a less free-thinking time.
[Fleet Street photographer John Topham] took [these] photographs in 1940, during a visit to the base of the Royal Artillery Coastal Defence Battery at Shornemead Fort, near Gravesend, in Kent.
Topham’s intention had been to photograph the men rehearsing in drag for one of the regular shows they staged to keep themselves entertained.
But during his visit the troops were scrambled to deal with the approach of Luftwaffe bombers flying across the Channel to mount raids over southern England.
With no time to change back into their uniforms the men went to their battle stations still dressed head to toe in women’s clothing, followed by Topham.
Following the war he recalled that the Ministry of Information feared these particular images could undermine morale by giving the impression that British soldiers were not quite as manly as the public might want.
. . .
Staging pantomime shows and music hall skits proved to be a popular pastime among servicemen and were found to help maintain morale during wartime, with shows even being put on by British PoW’s held in German prisoner camps.
There's more at the link, including more photographs.
It may seem silly to an American audience today, but such cross-dressing acting was common in England in those days. Both my parents took part in similar performances, a normal part of boosting morale and entertaining themselves in pre-television days, when the stresses and strains of war demanded any outlet they could find. To this day, pantomime performances in England usually involve cross-dressing actors and actresses, with no weird sexual connotations at all (apart from those uttered tongue-in-cheek, of course).
Heck, if confessions are in order, I won a Miss Lovely Legs competition myself one time, in my dim and distant past. I borrowed a (rather large) nun's habit, complete with wimple and coif (from beneath which my full, bushy beard blazed out in all its hirsute glory). The habit came down to the tops of my thighs, dangerously close to exposing my assets, as it were. Underneath it, I donned fishnet stockings (with the hair on my legs protruding profusely from the netting). My Army boots, suitably polished to a parade-ground gleam, rounded things off. They claimed they gave me the award just to get this ghastly vision of (im)perfection off the stage! (I'm pleased to relate that as far as I know, no photographs of the event have since come to light, so blackmail has never become an issue.)
One has to laugh at some faceless bureaucrat in London, worrying whether the mighty Nazi war machine might use pictures of cross-dressing British servicemen as propaganda to prove that such foes could never threaten the mighty Third Reich. German propaganda was never noted for its sense of humor. They'd have taken a darkly, starkly moral position that would probably have produced more laughter than the original actors!