@Kerta According to Venerable Sujato in Some inauthentic passages in the Early Buddhist Texts, the discourse that you quoted, DN 21, is late (I believe this applies to its parallels as well).
That being said, it’s certainly possible for virtuous people to choose what kind of rebirth they want according to MN 41 and SA 1042.
@ERose There’s nothing wrong with choosing where one wants to be reborn, it’s perfectly in line with the Buddha’s teachings that are given to lay people, especially those who aspire for stream-entry or once-return. Since they still have to be reborn, it makes sense for them to choose where they want to be. The Buddha has given many options to practise according to one’s faculty; it’s only natural for those who want to realise awakening yet still enjoy sensual pleasures to choose options that are available to them.
I personally don’t see anything wrong with people of different genders practising the Buddha’s teachings. The early discourses that are extant in a few ancient languages also don’t support the belief that one’s gender is an obstacle for one’s spiritual progress, or one’s gender is a result of some kind of bad deeds. Being a man, a woman, or an LGBT person is just a part of nature.
As long as people are virtuous, endowed with right view, and practise according to the Buddha’s teachings, then being a man, a woman, or an LGBT person makes absolutely no difference. It’s one’s view and conduct that count.