Unfortunately, this is just a limitation of the current system. By selecting 'male' or 'female', the game assigns what terminology your Sim is referred to by (excluding pronouns). It's a way to maintain the core gender binary the game was built around, with customisable pronouns serving as a rudimentary fix to allow further customisation.
I can understand the reasoning behind this; the majority of the content for this game has been designed around this binary, and changing CAS further to reflect a realistic range of body types and gender diversity is not an easy undertaking. Most of the gender customisation in CAS is assigning attributes of a model/code intended for one of the binary genders, and replacing the corresponding code in the other one. Unfortunately, this is why there are so many issues with gender diverse sims, because they've essentially been frankensteined from pre-existing models/code and not built on a new, neutral base.
This is why clothing warps around certain frame/gender combinations awkwardly, because the mixed models/code are giving the clothing models confusing instructions. More relevantly, this is why certain strings do not reflect gender neutrality/the correct gender terminology for Sims with customised pronouns. The game still views a female sim with he/him pronouns as a female sim, first and foremost.
I feel like we can't achieve a perfect solution in The Sims 4. There's too much work to remake the base sim model completely, something best saved for The Sims 5. But it would be nice if there were options, inside the custom pronoun box, that allows you to select what gendered terminology you wish to use. A neutral option ('parent', 'spouse', 'partner', 'sibling', 'Mx.', etc.), a masculine option ('father/dad', 'husband', 'boyfriend', 'brother', 'Mr.', etc.) and a feminine option ('mother/mom', 'wife', 'girlfriend', 'sister', 'Mrs.', etc.). It would require another strings overhaul (which again, is no small task), but would likely be somewhat easier than the update allowing for customisable pronouns.
I know that gender diversity isn't a trinary, and this solution doesn't give you complete control (say, you want your sim to be referred to as a 'partner', but also as a 'dad'), but it's realistic with the pre-existing limitations of the Sims 4, and a lot better than the non-existent binary 'option' we currently have.
To the Sims development team: apologies if my tone has seemed overly critical. The pronouns update was wonderful, and I do admire your commitment to adding as many options as you can within the restraints of the pre-existing code. This is just my advice on how to maintain consistency between pronouns and gendered terminology, to avoid players feeling alienated or confused by the language used by the game to describe their gender-diverse Sims.