I don’t think it’s offensive by any means, but I think it would be better as a society to get away from labeling things as masculine and feminine in a way that refers back to a traditional gender binary and assumptions. The A/B system serves that, though it fumbles when your character’s pronouns are also determined by this choice.

Personally I think they ought to make two base bodies (small and large) and then add boobs as a toggle for both. And none of this business with separate hair and face options either.