Even though intersex people are a biological fact and the 'X' would make sense in that case, my guess is they were far from the minds of the authorities when this decision was made. It's just pandering to delusional idiots and bringing intersex people into the equation is clutching at straws for the sake of arguing.
Instead of guessing you could do 5 minutes of research. As I explained earlier, this whole process was started because an intersex army veteran sued the government in 2015 for refusing to issue a passport unless they picked male or female, despite biologically being neither. Literally the entire process for X on passports was done because of a complaint by an intersex person.