It IS a bit much, but what does a teacher do if it's happening in his or her classroom?
The way I read this, a child was identifying as the other gender, and brought in the books to the teacher. Ideally, I would have wanted to draft a letter to parents explaining the situation warning them that their children will have questions, and I wonder why that wasn't done. What I wonder is if there was some kind of privacy issue with the child and her family.
Although, once the child started dressing and identifying as the other gender, it becomes pretty obvious who it is.
Bottom line, this should have been discussed with parents, so they could address the situation at home. Of course, the transgender child in question still deserves every bit of support a school community can give, regardless of your personal opinion.