The only thing I will sometimes give these character creators a degree of credit for is if they automatically default to the correct 'pronouns' based on whether you have picked a male or female 'body type'. I find this amusing as it tacitly acknowledges that it's normal to infer pronouns from the sex of the character, and abnormal to do otherwise.
And what if the bolded becomes the de facto standard? Is that a viable middle ground so we can all agree and move on?
I think we have had a similar exchange before where I said there is no reset button on this topic no matter how much noise is made or "boycotts" occur. The western world is simply too polarized (or too far gone if you think that's appropriate) to naively rewind to whatever point in history is convenient to any individual's worldview.
As someone looking at this from the left, but also sympathetic to the right's perspective, default pronouns aligned to body type, where options aren't forced makes sense. Neo-pronouns (ze/zir etc) where language itself is being invented/distorted makes no sense. Adoption of that has been super low anyway and will likely disappear eventually. Explicitly acknowledging male and female body types instead of dehumanized numbers makes sense. And for those inclined to change defaults, options make sense too.
It is not the job of a developer to dictate what is right for society. It's their job to make
more people want to play their games, instead of fewer. They are currently a bit lost from the last decade of madness and the past couple of years of counter-madness. An acceptable middle ground can help them find their way back to focus on what's actually their job - making good games.
If a portion of society feels alienated without it, they might as well throw in the option. Nobody gets gender dysphoria (or mental illness if you think that's more appropriate) from the mere sight of these options in games, so catastrophizing this is pointless. And given devs are mostly woke anyway, they will be inclined to oblige with options. It costs near nothing to build and everyone gets what suits them.
I think you are onto something practical, if you meant that statement in earnest.