This is a scripted show. I would say this is to goose the ratings like those shows on housewives who are always upset about something. The problem is that these shows will dig deeper for something more offensive next time.
Of course, it was or it'd have disappeared on the editing floor. That's what people are forgetting about. I didn't watch the show but do know the producer pushes story lines and tells the host to get the contestants to spill juicy tidbits at tribal council. You can bet your right arm that this was done. The tv audience knew about the he/she last season so Burnett couldn't wait to get it into the show. It's a fact that in the first few seasons, the producer photoshopped scenes or seriously manipulated them so that what was seen wasn't what really happened. Guarantee this transgender storyline was intentional.