Is it appropriate to correct your child when they mention someone appearance in relation to gender specific clothing?

For example: I was in the store and there was this person that had feminine features (long hair & make up) but dressed/presented in a more masculine way (baggy pants, polo shirt and baseball cap). There were these 2 little girls with their father, one little girl asked her father if the person was a boy or girl, and the dad simply said “shh”. Being the little kid she was she kept the convo with her sister. They then began to go back and forth with each other on how “that girls wearing boy clothes”

Which got me thinking, in a situation like that is it appropriate to correct and educate your child on gender/sex/presentation or do you just leave it alone?