It's common folk knowledge in my trans community that HRT often stops or in some cases partially reverse hair loss. See [1] for a case study, for example. Testosterone is correlated with hair loss and I could see how increasing T would worsen it, but blocking testosterone and increasing estrogen does have the opposite effect.
I'm going off of what the cancer doc has told various family members, especially that they're hesitant to use hormone therapy for cancer patients due to the wide amount of negative consequences that come from getting your hormones out of whack.
Of course, such treatment has many side effects. It's just that hair loss isn't a side effect of estrogen that's common enough that everyone in a town would suffer it. In all likelihood some other cause or contaminant led to this.
1: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5367483/