Firstly, anything to do with anything based on a "holy state" is irrelevant; no laws or rules should be based on, or affected by gobbledegook fairy stories. If some people choose to believe that stuff then that is their right, but it is against everyone else's rights to have any such laws forced upon them.
The article states:
"The legislative change allows parents to opt out of determining their baby's gender, thereby allowing those born with characteristics of both sexes to choose whether to become male or female in later life. Under the new law, individuals can also opt to remain outside the gender binary altogether."
So it doesn't appear that parents can choose whichever gender they wish for their new child, ie if they have a boy but really wanted a girl they are not being given the legal right to declare him as female and send him off to school in pretty dresses. The article specifically refers to intersex babies, it's not entirely clear whether parents can opt out if there is no physical amibguity, but if they can then it is still not a declaration of an alternative gender, it is merely delaying the decision, leaving it for the individual to decide for themselves later in life, or indeed remain opted out althogether.
Personally I suspect it may be much simpler to leave the system as it is, but with the exception of children born intersexed or allowing those given such a diagnosis later in life to amend their birth certificate by "opting out". Not sure if it's still the case but at least until very recently parents have had the right to "choose" such a child's sex within days or weeks of birth, even to the point of giving consent to surgery to make the child physically one or the other. Clearly this is wrong (obscene in my mind) as they can't know how the child will eventually identify, thus any such hasty decision can ruin an individual's life.
So intersexed babies have a need to be opted out, for anyone else it is just a statement of their physiology, and if they wish to "change gender" in later life then they will still have to jump through all the medical hoops, and once that is all done, in reality getting the M changed to an F on your birth certificate is as easy as filling in a couple of forms.
But if you're going to have a Male. Female, or Undeclared option for everybody, then why bother with the question at all?
xx

Obviously it's intended as positive step and as such I applaud it.
I think though that just because there would be the option to not declare gender on birth certificates, would not inevtiably lead to people going through school or living their life with an "undetermined gender". Indeed the whole point of this is to allow self-determination of gender, and not to force people into a, er, no-man's land of not being one of the other, unless of course that is what they wish. Apropos, will it lead to legal recognition of those who identify as truly androgenous?
The point is, people have a right to determine their own gender, and this law is intended to end the discrimination that prevents them from doing so. Most kids, by school age, know whether or not they are happy in their gender, so in an ideal world they would be free to live as they please. In reality though, most parents will be unwilling to allow their boy to present as a girl or vice versa. 
It's a step in the right direction, but it's not going to change the thinking and ruling of the majority of parents. Perhaps it will make it easier for people like us when they become adults. Perhaps it will make no difference, I don't know. I suspect having the option to not declare physical sex on a birth certificate (ultimately the parent's decision) will make little difference to a regular transgender person in the real world.
xx

It does seem to be a step in the right direction but I can't imagine many, if any, parents leaving the field blank so I wonder how much difference this will ultimately make. 

 

To take it further, why does gender even need to be marked on a birth certificate at all? It is easy to say that it needs to be there but why, simply because that has been the norm? Most people will be certian of their gender early on but some, ike us, will not be so certain or will know that they are different and those feelings often come to the fore with the onset of puberty, at which point they could then make an informed choice. I can see many legal difficulties with this of course, and I'm not saying it is the right way to go, but it is worth considering. 

 

Gender isn't a biological trait like sex, so why list it? We don't list sexuality which is also not a biological trait after all. It's an informed choice based on one's own emotions and sense of identity.