Firstly, there is no good reason for passports to indicate the holder's "Sex" at all, it's supposedly for "identification" but such "identification" is of very limited value compared with the picture. It's based on norms or stereotypes. There are tall muscular women and short less muscular men, the reverse of the norms, and such people shouldn't be subject to extra suspicion. I hate stereotypes*.
Sex wasn't added to passports until 1976. Somehow, humanity got by for thousands of years without such identification. In 1976 the excuse was that changing styling norms made implicit Sex harder to identify. But I can't understand why that was even an issue. The look is the look, regardless of what Sex it suggests or embodies, and the look is what you see, unless you are disrobing people. No government official needs to know the Sex. They just need to see that the picture matches, and now we have sophisticated biometric facial matching. Those are now considered so good that specifying height and weight is not done anymore. (I think height and weight would be more useful than Sex for identification in most cases. They can change but usually not that quickly.)
Anyway, a "Sex" requirement for Passports is now in international agreements. I'd have my country comply with current international agreements by making X the requirement for all. We don't participate in stereotyping. Look at the picture, look at the other information. Sex assignment is none of your damned business. Both libertarians and communists should support that, with different reasoning. Communists should realize such information only serves some kind of discrimination or exploitation, which is what pure communism is supposed to eliminate. Libertarians should see any information that does not serve a legitimate government purpose should not be provided to it, because it enables some kind of unwanted government control. Sex at birth neither identifies the current presentation (clothes, styling) nor the current genitals.
But if you ARE going to have Sex for identification, it's pretty good follow the rules established in 1992 for such purposes. After sexual modification, one becomes the new gender for identification purposes. Even the Soviet Union recognized that. Then X is for people who haven't yet met those modification requirements. This was a very reasonable system, neither fully libertarian (everyone is X) or not.
Requiring only sex at birth does not serve identification requirements. It is political posturing against trans sexuality, and nothing more.
It might not be entirely unreasonable to add more explicit labels than X. For example, trans-Male and trans-Female. These would be used if people didn't yet qualify for labeling as their chosen gender under the '92 rules. This works for identification even better than the '92 system. It's not the preferred solution of either libertarians or communists, but it's not unreasonable either.
Identification by current sex status could be useful with dead bodies. That is, what are the genitals now, not what were they at birth. That's basically what the '92 rules do, and indicating the trans status goes farther than X which could be either.
https://www.cnn.com/2025/11/06/politics/supreme-court-passport-sex-markers-transgender
https://www.nytimes.com/2025/11/07/opinion/supreme-court-trump-passports-gender.html
The Supreme Court claimed "sex at birth" is a historical fact. Fine, but Customs is not an academic or medical history department. It is involved with identification for which "Sex at birth" is not even a relevant fact. The fact relevant to identification would be Sex at Present.
*I'm kind of an odd person myself, and that seems to attract the most aggressive dogs, thugs, and racist cops, except that as a lucky white guy I haven't had any trouble with cops. I would prefer being judged by rules rather than stereotypes. If I'm not stepping on owner's property, or if I'm doing so for a legitimate purpose like delivering the mail, leave me alone. I don't want to be attacked because I look fearful or indecisive or just different.
