Don't know who started that rumor, but it has 'fan bait' written all over it and most of the internet has swallowed it hook, line, and sinker.
One of the biggest reasons why Super Mario Bros make over a billion in boxoffice is because of Japan, which has 123 million in population.
One side of the political isle in the western world may want the trans-propaganda to be normalized, but over in Japan and most of the far east & middle east has no tolerance for that bullshit.
In otherwords, even if this rumor was true and the movie studio was seriously acting to make this casting happen, Nintendo would overrule them.
Violence/Genocide: Do not condone violence or genocide on a person or group of people. You are free to attack a person or groups ideas but you are crossing the line when calling for violence. This will be heavily enforced in threads with breaking news involving victims.
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