I am going to refer to the teacher as male because my child genuinely does not know how they currently identify. Sounds like they were male and then to be addressed as they/them and DS thinks might now be a transgender woman - changed name and hair - but DC is not certain.
Apparently children have been told off for addressing him as he and DS tells me that he doesn't ask him anything if he can help it because he doesn't know what to say.
Teacher has asked them to address him by a short version of his first name which I've only heard used for a female previously. DS feels awkward using it. Other teachers are not addressed by first names and usually addressed as Sir/miss.
I might ask school to revise how this teacher is addressed. Maybe "Teacher"? Not sure that works but I'd rather not have the casual use of a shortened first name where this isn't what generally happens.
My son is already used to asking people how they want to be addressed due to various identities in classmates and doesn't usually feel awkward. I think it's because it's an adult. At 12 I don't think he should have to ask the teacher.