What would you do if you had this conversation with your 5 year old boy?

My son just started kindergarten and has been coming home saying some odd things here and there that I assume he’s gotten from other kids. None of it has been overly concerning but yesterday this conversation went down:

“Mommy, can I wear a dress to school tomorrow?”

“Um well I don’t have a dress for you. Why do you want to wear a dress?”

“The girls wear them and I think they’re so pretty.”

“They are so pretty, aren’t they?”

“Can you buy me a dress?”

“What kind of dress do you want?”

“One with strawberries on it!” (He loves strawberries)

That was kind of the end of the convo for a while, he went to go play with his brother for a bit. However then he came back and said this:

“Mommy I think I want to be a girl. What is a good girl name for me?”

I said “you don’t like your name anymore?”

He said “yes but it’s a boy name and I don’t want to be a boy.”

“Why not?”

“Ms. ____ (his teacher) says we can be boys or girls or whatever we want. I don’t have to be a boy if I don’t want to be.”

So… I am not transphobic or homophobic. I am myself bisexual. But am I wrong to be a little upset that this convo apparently went down in my child’s kindergarten class? They are 5 years old. What would you do? Would you bring it up with the teacher?