(I'm so sorry for writing so much. Skip to the last paragraph if you have to. There's a tension in me because I fall on both sides a bit.)

It's an indicator of developer focus and intent. Sometimes.

If people's introduction to trans characters wasn't "hi, I'm trans" then maybe they wouldn't have these stereotypes, but we are where we are. Pretending that it's just extra options is ignoring that the people that push this sort of thing also seem to think we also want to read their shitty writing and shitty characters.

Their dumblelore/voldemort slash fiction bullshit was trash 15 years ago and they haven't improved because their focus is social issues, not good writing. That's the real issue - paper thin characters that are just vehicles for social commentary. Subversion isn't annoying your audience from the start, it's developing deep characters with all the flaws of humanity that also happen to have atypical identities.

My favorite book series are The Culture novels and Discworld. They both have trans characters that aren't there just to push narrative. They were well written characters that fit the world and also trans. In the culture it's not even remarkable - they've solved everything biological so it's just kind of there. Discworld is more by-the-horns, but he still manages to be sneaky with the subversion and it works every fucking time.

On the flip side, Hugo award winner A Deepness in the Sky has a character that uses gender neutral pronouns which is whatever. Not a big deal, but it was the first time I saw it in a book. What was the book? Torture/rape fantasy set in space. It's one of two books I couldn't finish. The other is Atlas Shrugged. Coming from someone that's read a lot of more classic science fiction and considered a Hugo a seal of approval, that was a very harsh realization.

I don't think there's anything wrong with extra options or making ugly characters (though I don't get that - there's a sweet spot between fan service and trash can) but I don't consider them a useful feature if the game is shit. If they focus on the game and add 'woke' shit to a good game with well written characters it'll go down like honey. If the devs see the game as a vehicle to disseminate their social ideas, they're in love with themselves and not the game and people will see that. It can, and has, been done well.