To get an injunction blocking a law in advance of the full case, the moving party must demonstrate both irreparable harm, and a likelihood to succeed on the merits of the case.
If you read about federal court cases in 2025 you'll hear the word "likely" a lot. That is a sign the court is deciding whether to block an action at the beginning of a case. The courts can only act quickly with a lower standard of proof. "Likelihood to succeed on the merits," is that lower, expedited standard.
That would require rewriting the miis from scratch. When they were first created miis had binary genders, and that assumption was baked in from the start. Changing it now would be expensive so they do this sort of half measure.
A lot of games tried to retrofit gender diversity into already existing character systems and it doesn't work well. For example, cyberpunk's V can have any genitals or body shape you want, but the game was written from the start with an assumed strict gender binary. Your character's gender is whichever voice you pick.
Hopefully in the future these character systems will be built with that sort of flexibility. But its quite common to have strange results from retrofits like the miis.