That little boy is being damaged by all of this. He's bullying, he's acting out and because of his "protected characteristic" he's getting away with it.
I think there's an element of "reward" in it for him, not that I think he would even understand it in that way. Being a girl makes him special to his parents and because he's special he gets more love, more attention, more - as we'd have put it when I was a child - spoiled. He's living the lie of his parents and the better he lives that lie the more he gets from them. Right now, in terms of his ability to understand the game they're making him play, there is nothing but reward for him and he's a child, of course he's happy to "be a girl" because that's what makes him special and being special, etc.
Interestingly, because he is a spoiled boy he is showing the sort of behaviour one would expect from a spoiled boy of that age. He's acting out, because he can, after all there seem to be no repercussions for him punching a girl in the stomach or other violent acts. If he was seen as the little boy he is he'd be punished for that behaviour but he isn't, so why not be even naughtier? After all he's not going to get into trouble, Until one day, of course, he will. And as he gets older the pretence that his parents are pushing will be a more obvious lie. It's easy to pass as a boy or a girl when we're that young, less so once puberty kicks in. He's already taller and stronger than the girls and that will only become more pronounced.
I'm sorry, I'm sort of rambling, trying to get my thoughts in order. This currently spoiled, "special" little boy will be damaged by this game that grown adults who should know better are playing. This "protected characteristic" isn't protecting Bobby at all and it's in danger or ruining his life. The girls have lost their trust and innocence which is absolutley appalling but I dread to think what he is losing and what he still stands to lose.