From what I remember seeing of raw script, it's something along the lines of "if character is X, display text 'xxxxx'", and as I've been saying it's not just a matter of dropping in a single word in the right place bacuse there are so many different forms of gendered words or sentences.
It's not a matter of dropping in an external placeholder to determine whether
Thancred tells you he's "quite taken with you" or simply "somewhat in awe". It's not placeholder text that determines how
Magnai and Daidukul react to you. It's specific text at that place in the script which must check your character's gender and display the appropriate set of text boxes, but it's not just dropping pronouns alone into a generic script.
I can only imagine this "third party plug-in for custom preferences" had to do a lot of work to set up a custom system. It also presumably stores that information locally, and doesn't transmit it to other users, but if you want others to see your custom pronouns then that information has to be carried along with your character to every other person who sees you on their screen.