My head hurt after reading this, so I’ll say what I’ll say and leave at that.
That situation is fucked up.
A 5 year doesn’t have the capacity to understand gender declarations. A 5yr old just learned to stop eating crayons and he’s moving on to glue.
The scenario is inappropriate and the teacher should have the right and the ability to bring in a professional, in mental health, child psychology with years of specialization on this sort of thing.
The kid is 5. The parents don’t know wtf they’re doing and the poor kid sure as hell doesn’t know what he’s doing.