I understand where you're coming from, and the male/female clothes deformation looks bad, but it has its reasons. I hope I can explain this right...
To make a 3d game, characters are sculpted, rigged, and animated.
Now.. the male and female are two different meshes, especially around the chest area meaning different polygon/vertices placement.
These meshes are rigged, meaning a skeleton is made for them in which the mesh is "skinned" to the joints, meaning the vertices follow the joint for a certain percentage.
The clothes are made in a similar fashion, for the original mesh, so male or female, thus follow a similar topology on the mesh, which is skinned to follow the same joints.
Not only that, but they added shading to the textures of these meshes to create depth for female breasts.
By allowing male sims to wear female clothes and visa versa, what happens is that the skin information, so the vertices that follow the joints, do not match with the original topology, which then creates the catastrophe that you behold in the pictures. This effect is increased by the faux shading in the textures.
To fix this, EA would have to:
- create new meshes that share the same topology. <- meaning you get a very basic human shape that looks neither male nor female.
- create new textures that don't have faux shading in them. <- meaning you get very basic/flat looking sims and sim clothes, OR require a 4000$ computer because of all the rendering involved now that the depth/shade has to come from a light-source in the game to bounce of the vertices in the mesh. Either way the game will be worse for it.
- rig these new meshes and recreate CAS. <- this is the most time consuming of everything.
- develop new customization in CAS. <- because the male and female "shape" is gone, they would have to be made by us, the players, in CAS, meaning we get to decide the shape of the muscle mass and fat mass! That is insane, the majority of humans don't even know how these shapes come to pass in our bodies and what affects it, we're talking genetics here and an advanced artistic understanding of the human body. Long story short you're going to see Frankenstein creations like never before, not to mention this will all conflict with the animation resulting in clipping.(clipping is when two meshes go through each other)
- recreate all the clothes to fit this new mesh.
And this depends on what engine they use, but if they made it old school that means each rig has its own animations, meaning the male animations cannot be transferred to the female rig and visa versa, so they would have to create those animations twice.
Simply put, these are core game mechanics, meaning the game is built on the design of having male and female sims and nothing in between. They probably didn't anticipate their player-base to want non-binary characters, so they did what they could to please-the-crowd when it turned out they did, resulting in well.. The awful looking abomination that is the skin weight transfer between the two rigs.
So it will not be fixed. Maybe Sims 5? But not Sims 4, they're not going to do all of the above, or recreate 5 years worth of clothing articles for the opposite sex. (we're talking sculpt, uv, texture, skin weights)