I'm curious if you can stick something in the title that is totally stupid. Like a Sim who decides to identify as an onion, or a hovercraft. Maybe they subsist on a diet of paint chips.
I would hazard a guess and say that the system is opt-in, so you won't have to go through all your Sims and manually set their preferred pronoun. Perhaps it'll live alongside the clothing choice and walk style selections in CAS. This is conjecture on my part though.
I haven't really been keeping up with new stuff in the game. Time for me to track down some info on this feature.
https://ea.com/games/the-sims/the-sims-4/news/customizable-pronouns-coming-to-the-sims-4