Updating this regulation would make it easier for transgender individuals to have consistent legal documents, something that is essential for many who have transitioned from one gender to another. Having inconsistent legal documents can create difficulties for transgender people, as well as make them vulnerable to discrimination and harassment.
Though one may argue that birth certificates are historical documents, it is ultimately more important that birth certificates be accurate. It is already possible for a person to have their birth certificate changed by court order, so clearly, birth certificates are not set in stone. Birth certificates do not always reflect a child's genetic history. For example, children who are conceived using an egg or sperm donor generally do not have the donor listed as a parent on the birth certificate, even though genetically, the donor is one of their parents. When a baby's sex is recorded, it's based on the doctor's best knowledge, usually based on the appearance of the genitals. But we know that intersex individuals are sometimes assigned a sex at birth based on the appearance of their genitals rather than their chromosomes. In the case of transgender people, many feel strongly that they have always been the gender that they identify as. Those who medically transition may change their bodies significantly, meaning that the sex listed on the birth certificate is no longer truly accurate even in a biological sense.
Ultimately, the only people who need to be concerned about a transgender person's medical history or their chromosomes are the transgender individual and their doctors. Birth certificates are most often used as a form of identification, so it is vital that they reflect who a person actually is, not who they were believed to be at birth.