Some characters might be very surprised at first. For example, Asuna could be initially shocked but then become very protective of Kirito as a girl. Klein might make some teasing remarks but still be a good friend. And the villains might see her as an easier target or a new kind of threat depending on how they view female characters in general.
Well, other characters' reactions would vary greatly. The more chivalrous ones like Eugeo might become overly protective, seeing it as their duty to safeguard Kirito in her new form. Some of the more competitive male characters could feel a strange sense of rivalry or jealousy. Female characters could either be welcoming and form sister - like bonds with her, or they could be envious if Kirito as a girl gains more attention. And there would surely be characters who are simply confused and don't know how to interact with her at first.
All Might would probably be very supportive. He's always been about the spirit of heroism, not gender. He'd encourage Izuku (as a girl) to keep training hard. Bakugo might initially be shocked and then try to act all tough, but deep down he might be a bit confused about his feelings towards her. Ochaco would be excited to have another girl around and might become even closer friends with Izuku.
The other characters' reactions would be quite diverse. For the more competitive male players, they might see this as an advantage or a disadvantage depending on their relationship with Kirito. If they were rivals, they might think it's a chance to outdo him now that he's a girl. But if they were friends, they would offer support. Female characters like Silica might be excited to have another girl around and might start sharing girl - only things with Kirito. The guild members of Kirito's previous guilds would likely be confused but still accept him, after all, they know it's still Kirito inside.
Sasuke would be extremely suspicious. He has always seen Naruto as his rival and a symbol of the village's hope. If Naruto starts acting like Pein, Sasuke would think it's some kind of trick at first. He might even be ready to fight Naruto to figure out what's really going on.
The plot could involve Kirito, now a girl, exploring new aspects of her identity within the fanfic's world. Maybe she starts to see the virtual world from a different perspective, noticing details that she overlooked before. She could also form a unique bond with female characters in the story, sharing experiences that were not possible when she was male. And she may have to deal with discrimination or over - protection from other characters due to her new gender.
Kakashi would likely be amused by the whole situation. He might give Naruto some tips on how to blend in better as a girl, using his own knowledge of disguise techniques. Iruka would be more concerned about the reasons behind Naruto dressing as a girl and would make sure Naruto is comfortable with it. He would also be there to support Naruto if any of the other villagers had a negative reaction.
Sakura would be heartbroken. She's always had feelings for Naruto, and seeing him insane would be a huge shock. She'd likely try to use her medical skills to find a cure for whatever is ailing Naruto's mind. She might also try to get help from Tsunade, hoping that the former Hokage's knowledge could save Naruto.
The other characters' reactions would be diverse. Bakugo might initially be very confused and maybe even mock Midoriya a bit, but deep down he'd still see her as a rival. Uraraka would probably be very empathetic and quickly become a good friend to Midoriya in her new form, helping her with things like getting used to the new body. And All Might would be very supportive, seeing it as just another obstacle Midoriya has to overcome in her journey to become a great hero.
Some of the male characters might be a bit flustered around Naruto as a girl. For example, Kiba might act differently, not quite sure how to interact with her in this new form. Hinata, on the other hand, could become even more shy. She already had a crush on Naruto as a boy, and now with Naruto as a girl, her feelings could be even more complex. The Akatsuki members, if they were to encounter Naruto in her new form, might underestimate her at first. But Naruto, with her indomitable spirit, would soon show them that she's still a force to be reckoned with, regardless of gender. And the reactions of the characters would not only be about how they see Naruto, but also how Naruto's new form affects the power dynamics and relationships within the Naruto universe.
Sasuke might be extremely suspicious. He has a long - standing relationship with Orochimaru, and this sudden change would make him wonder if it's a new trick. He would keep a close eye on her to see if she's still the same threat.
The other characters' reactions could vary widely. His close friends in the fanfic might be in a state of panic, crying and not knowing what to do. Enemies, on the other hand, might see it as an opportunity to take advantage, or they could also be secretly worried depending on the complexity of their relationships. And there could be those characters who are just bystanders, shocked at first and then trying to figure out what happened.