I'm almost certain they DO expect you to take it that way. The English localizers kept trying to make Marina seem less gay in Splatoon 2 so they let her fuck in 3 to atone
Nintendo Are Fascists answer: trans people are great to assimilate if they're straight
Nintendo is a corporation answer: they probably just didn't control their image quite as tightly back then, they let Golgo 13 onto the NES, and made Captain Rainbow which has bathroom transphobia innit
they probably just didn't control their image quite as tightly back then
It actually looks like they might be including it in the English version this time! The game is getting completely relocalized.
This is the only dialog we have so far regarding it—It seems as if Beldam is refusing to recognize Vivian as her sister a la the Japanese script. Though, Goombella and the narrator are also bigoted in the original version, which I can't imagine they're keeping.
It's a Japanese culture thing, not a Nintendo thing.
Japan - and a lot of other countries, Iran being a big example - take the Transmedicalist view as mainstream. They value cultural assimilation along gender lines, but also understand that a trans person is not their AGAB. So as long as you do everything in your power to comform to your preferred gender, most (but not all) people will accept you. Being trans is fine; being "queer" is not.