... But... they're not fetishizing an entire already fetishized community. They're fetishizing actions. People usually don't care who is doing the actions, but what the actions are. That is completely different.
There are too many ways to be intersex to include it respectfully, and the community is already fetishized quite a lot.
From what I have seen from their responses (as I am NOT a developer, just someone who follows the game), they're not comfortable with including content that is likely to come off as disrespectful, as it is impossible to show every way to be intersex, and they want to avoid the stereotype of "Intersex = sexy combination of penis and vagina" as that is harmful to the community, where bullying does not harm an entire community.
Now, if the bullying specifically targeted certain traits of the MC (skin colour, gender, sexual/romantic orientation, etc), THAT could be harmful, as it is directly targeting an entire community. But bullying that is "Lmao I hate you, gimme money or I'm gonna punch you Disney Style™" is not offensive in the same way.
Edit: Plus, you can block bullying! They do not, however, allow you to completely prevent a gender from spawning or edit someone's sex, so if you're not comfortable with that fetish, you wouldn't have a choice.