I think it does still do that. One of my friends had a "girl" added via her facebook account linked to Classic. This "girl" was one of the ones that many people said was a boy irl and when their name was replaced with their facebook name, people found out it was really a guy pretending to be a girl the whole time.

It's really their decision on what gender they want to be in Graal, so this should definantly be fixed if not already. Not sure. This happened around a week ago.