You know how some pretty transphobic people suddenly change their tune when someone they care about comes out, and they become clumsily supportive? I feel like that's closer to how Cy would be. I don't think he'd necessarily "believe" Kate in terms of being a man/woman, but he's not the kind to go out of his way to misgender people. He'd probably say some bigoted/uneducated shit without really meaning to but overall be willing to learn. Trans jokes are still not off limits, though. Also, fun fact, I drew a few yaoi AU comics where Kate comes out as a trans guy and Cy's main complaint is "I don't like the pattern this is setting in regards to the two people I've ever had true feelings for" 😂