Hello, thank you for your question!

We'll start with the easiest part of this question first.  In general, we do plan on handling cases like this for characters with unique gender identities in their canons and their AUs, as we know there are definitely cases in which characters identify as trans/non-binary/etc. As we plan on handling cases like this on a case by case basis we currently do not have a hard set yes/no ruling.  That said, we do reserve the right as a modteam to ask our players to revise their AU if we feel this part of their AU doesn't wholly shape the character or have an impact on the canon character themselves. So basically yes, we do prefer that players provide an AU with more than "they are now a man/woman/non-binary/etc." and we will be carefully reviewing those write-ups in conjunction with the canon.

In the specific case of Mordred, based on this summarization and based on how our regains work, she would eventually regain her canonical appearance which is that of a female form. While we don't discourage tough calls such as physically changing forms (i.e. we have a few players interested in apping mutants/robots/etc. and starting them in one form and reverting back to their former selves) we ask that players take these things into account when creating their AU and how such things would play out in the future. In this specific case, depending on how it lined up with canon sources and how the AU was expanded, we would read and judge an app in which Mordred was born female and identified/was raised as male.

We apologize if this is a little vague, but since these are all very dependent on a case by case basis we try to keep things loose enough for you to play with but fair enough for our playerbase.  If you would like, you are free to privately PM the modteam to discuss your ideas further so that we may get a sense and give you a yay or a nay before any work goes into brainstorming/TDMing/etc.

We hope this helps!