Just to follow up/update, in case this helps anyone...
For the 2023 cruise, we kept the gender as "female" since that matched all the documents (passport, original birth certificate, driving permit), so everything had "Miss" on it, unfortunately. We had a little trouble at boarding because of the name change and the lack of experience on the part of those at port, but it worked out after a few extra steps. Once onboard, we told the room steward that the kid didn't want to be called "Miss" anything, and it was never mentioned again 🙂
Now, we are preparing to cruise again but with Princess and in Europe. When I booked it, we did not have an updated passport, but now the passport had been updated to show the correct gender (as is allowed). Driver's license shows sex assigned at birth, as required in our state at this time.
Once the passport was updated, it took about 8 calls over about 3 weeks' time to get Princess to change the title and gender marker, but when I finally got to the right person, it was done. Along the way, I was told several times that it really didn't matter, as long as the legal name and birth date matched. I couldn't seem to make the representatives understand that it DOES matter to my kid, who has a legal masculine name and doesn't want to be called "Miss." Plus, since the passport has the correct gender marker and we are travelling to Europe, I am hoping having it corrected on Princess's part, so that it matches the passport, will help make boarding a little easier this time, but I'm not gonna lie...as a parent, I am a little worried about the whole thing.
So what I've learned...for now, lots of people, including those in travel, still just don't really understand, and that is fine as long as everyone is respectful (and everyone so far has been, even when clearly confused 😄), although I do wish people weren't so fixated on feeling as if they have to know one's genitals in order to decide how to act around them. Hopefully one day there will be more training and more accepting options regarding this particular issue. For now, it looks like you can probably pick whichever gender marker and title you want during booking, and unless there is some reason for concern (maybe travel to certain places?), it won't matter.
Safe travels, everyone!