So instead of being a crossdresser character, this is ideologically altered to align with the recent trans ideology of "actually I'm
truly their sister / female, even though I had the male sex incorrectly assigned me at birth." This is very different from being a boy who dresses up; this is the much more recent ideology of having an inner gender identity irrespective of your body.
EDIT: actually I'm seeing reports that this line was added and altered in the Japanese of the remake as well (an entirely new line in the Japanese was added which is more carefully aligned with trans identity bs) so we
can blame Nintendo for it, not just the localization teams
Or more accurately: they had a crossdressing character in the original game as part of the humor, but now when they remake it, even in Japan the pressure is high to adjust and not offend anyone, and to make it seem more like a "trans" identity.