Markiplier reads fanfic because it's a fun and different kind of content for his channel. It gives his viewers something new and unexpected. Also, it's a way to give back to his fans who put a lot of effort into writing these stories.
They could be looking for new inspiration. Fanfictions can be a source of fresh ideas. The characters might find unique plot twists or character developments in the fanfictions that they can incorporate into their own 'lives' or further adventures.
Yes, he has. Markiplier often does unique and entertaining segments, and this could be one of them. He likes to interact with different types of content related to his fan base, and reading fanfics, even the not - so - good ones, is a way to do that.
His friends like Wade and Bob could be main characters. They would be the ones who first notice the change and try to help him. They might have some really funny reactions and also help him come to terms with being a girl. Maybe there could also be a mysterious character who caused the transformation in the first place and they have to find this person to reverse it.