Yeah, Capcom will go on record to say that she's supposed to be ambiguous but original japanese Final Fight concept art shows she was intended from the beginning to be newhalf i.e. transgender
so yeah that whole "they changed it because of punching women" or whatever is a total lie. Before that was even an issue she was already designated as newhalf.
Although they did still change Poison and Roxy to Billy and Sid because of punching women on the SNES versions