Meh. Up to the age of 7ish, barring interference, kids dress up, role play, etc in all sorts of clothes and roles. It’s how they understand how the world works.
Then around 7-8 socialization with peers kicks in like a hammer (if they’re going to public school – I don’t know if this happens outside of school socialization, but some kind of “kid norms” begins and woe to any kid who who has the slightest difference that can be pointed out by peers.
What they’re doing, once you eliminate the fancy words, is letting their kid be a kid and play.