I would consider male/ftm sex heterosexual because biologically it's a vaginal sex(penis-vagina). So I would consider it straight on some level. This whole debate hinges on whether one's subjective feelings should dictate reality. Just because someone views something as x, doesn't mean that it's x if it doesn't fit the criteria or definition of x.
I hate this debate because most people would consider a straight man having sex with a transwoman bisexual or gay. Outside of liberal and Western circles, most people are calling the couple below gay.