If you are born with a vagina then you are female, if you are born with a penis then male. This is the correct information that should appear on documents.
The fact you identify as something different, is accepted by society (and me), however this does not change the biological facts. So should a passport show the sex someone wishes to be, rather than the one they are? If passports showed height, should a short person be able to change theirs to 6ft because that is the height they wish to be? If they showed race. Would Michael Jackson's show white or black?
To me this is all a none issue. The important issue that I have tried to get over to you, is that a passport is a get out of dodge document. And I would never want to be without one for that reason. Arguing over whether it shows male or female is irrelevant. Would you rather be trapped in a country when SHTF because they wanted to put male and you wanted female? Imagine Jews in Germany desperate to get out, would they think this was a distinction worth dying for?
One final thought, I read this week. That transgenderism will destroy feminism! And I agree. All the undeserved rights gained by women can be claimed by men just by identifying as women! Think about it, its fascinating.