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Nope! That's not it at all. Quite the opposite. They won't let doctors take wild-assed guesses as to what some intersex infant's gender identity is going to be later on. (PS. "Intersex" is falling out of use. I believe current nomenclature prefers "DSD" -- Disorders of Sexual Development.)
Historically, it seems when doctors try to keep parents from being embarrassed by their DSD newborn's condition by offering surgical "clean up," they're wrong just about 50% of the time as to what that child's gender identity is going to be. As there are basically two dominant choices, that's a pretty pathetic track record and a bunch of ruined lives.
This way, other than any necessary surgical intervention to allow peeing, if they just leave the stuff alone, the kid will have enough material for surgeons to work with later on, after he or she figures out which gender they need to be.