Livejournal's senior manager responded to me with the words "this was a mistake" and assured me that the proposed change was not being implemented. Their Customer Care folks then followed up with an explicit statement that "We understand that gender is not binary, and intend to respect that understanding for our users." That seems to me entirely satisfactory. Someone wrote something which did not suit the organisation for which they work, and it is therefore not being used. In the public policy environment where I work, that happens all the time, particularly if (as I suspect here) there are people of varying linguistic and cultural backgrounds involved. Indeed, what is unusual here is the level of transparency at the drafting stage - a rather courageous approach for which one sometimes (as in this case) pays a price.
The whole kerfuffle began with a post by one of Dreamwidth's co-owners, a former Livejournal staffer, which inaccurately presented the coding change as a done deal, an irreversible decision. You will note also that in the comments on yesterday's post, a Dreamwidth staffer accuses Livejournal of lying to me, without evidence; and also makes the shocking assertion that Livejournal has been listening to its users, as if this were in some way outrageous.
Dreamwidth have gained a number of extra customers from Livejournal out of all this, based on a report from their own leadership which turns out not to be true, with the flames of this controversy being further deliberately fanned by their own staff even after Livejournal had resolved it. It is very easy to whip up fears of oppression among people who experience it regularly. It is more difficult in such circumstances to admit that you were wrong. I don't think this affair looks very good for a company which was supposed to represent a more ethical approach to the business of blogging.
I am also perturbed by comments I have seen here and there about this somehow being the fault of the Russians, including the fact that the senior Livejournal manager who responded to me and to many others does not write perfect English and has a foreign name (which looks Ukrainian rather than Russian to me, but what do I know). Really, folks, get a grip. You have no idea how privileged you are to be native speakers of the world's main language of communication. In any case I seem to remember that the frequency of Livejournal screwups was much greater, and that they were handled far more ineptly, when it was owned by Americans. SUP are running a tighter ship; the President of Russia is one of their customers.