What a fucking oddity.
Feel for the kid, it's parent is trying to make a stand, fair enough, but is inviting a world of confusion, isolation, and attention on a kid that hasn't chosen it. Which is, for me, a far greater imposition than permitting the gender designation shortcut at the beginning of it's life based on its genitalia.
I mean, should the kid be born with a penis and later feel more feminine or gender-neutral, I'm assuming it will have grown up in an environment that is supporting of that path. And the gender on it's documents won't be the biggest issue it faces. Also, were it to feel changing the gender on its documents is necessary, it is fortunate to have a parent who's been through it.