In agile development. You do a little, release. Otherwise it is too big and may never be done. The fact they committed resources to improve this is a positive. The hope is they build on it and add more options.
However, if they get trashed for trying, they and many other companies may not try. Why spend money to get a bad reputation when the spending nothing creates less I’ll will to the company. That is ultimately the decision Product Owners and Designers will weigh up.
I think for progress, the best approach is maybe “positive first step but more options are needed for non-bonary for this to really make players feel comfortable”.
From a technical perspective, separating pronoun hard coding from the models gives more scope to give more options in the future, however, as someone mentioned, there is a lot of art work needed on assets and animations so the new shapes function the same in all cases.