It at least doesn't maintain the pretense that these were somehow necessarily "either-or" alternatives or describing the same thing. It's a question that isn't inherently nonsensical. Which is something quite rare these days!
You could equally well have the same question "Which of the following best describes how you think of yourself?" with the options being "tall, short, male, female, dark, blonde, British, foreign, Mumsnetter, in another way, prefer not to say".
Which is all very well if interested in how people think of themselves for some reason, but also actually recording sex would probably be more useful for practical purposes, like monitoring sex inequalities.
I'd hope most people would put "in another way" unless they (mis?) interpret it as a "sex" question due to the first two options.
It would be less restrictive to drop the "best" and do "tick as many as apply" for this sort of question, but then I suspect they're trying to trick people into answering it as if it was a sex question, and that would break the illusion.