As far as she is concerned, Latinx is just another instance of white colonizers trying to impose their will on the indigenous population.
Is there a gender neutral term your wife likes?
A few Hispanic that were also LGBT started Latinx. LGBT Hispanic are not some hivemind borg and when people state "LGBT Hispanic people did X" it eliminates the agency of all the individuals who are both LGBT and Hispanic.
As far as she is concerned, Latinx is just another instance of white colonizers trying to impose their will on the indigenous population.