When you say the majority of children (I would argue people of any age actually) believe there are only two - man and woman - do you mean two genders or two sexes?
Or are you using the terms interchangeably? (I believe a lot of people do use the terms interchangeably, for example, when a couple expecting a baby see their unborn child's genitals on the ultrasound (i.e. they find out their baby's sex), and then have a "gender reveal".
I believe men are male people and women are female people, i.e. these words are about sex, not gender, and yes, there are definitely only two of them.
If you believe in the existence of gender as something which is separate from sex, you need to be able to explain what you think it is. If you think a woman can have a penis because you can be a biologically male person whose gender is woman, what exactly does that mean? What is gender? What is woman gender? If being a woman isn't about having female reproductive organs, what is it about? Wearing dresses? Liking the colour pink? Enjoying shopping as a leisure activity? What about all the women who don't do these things? What about all the men who do?
That's the problem with this.
Children are being taught about "gender", as though it is an actual, real thing which is separate from your biological sex but more important, and nobody is even attempting to explain what gender is or why it is important.
There's a reason for that.
It's because gender is a load of bollocks, but saying so is like pointing out that the emperor is stark naked. That's why anyone who questions it is labelled a bigot and shut down. That's why children who ask difficult questions get sent out of class.