You DO realize that there are people who are born with no or both genders, right? It's rare but it is real so they/them is real. Look it up, these people exist.
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Your statement is fictitious. There is no instance of intersexuality in the real world. But labeling genital-birth -defect afflicted as non-binary is instead very offensive for non-binaries and for them, since you're just assuming they have gender dysphoria over it and implying that non-binary identifiers MUST have genital defects. A child has no concept of sex. They can't identify as gay and therefore anything since they are realistically not ready for sex unless you're a pedo.
If the creator of this game really intended for the character to be non-binary, they should have made them with characteristics of both genders.