Final Fantasy 7 Remake has answered one of the burning questions long-time fans had about the reimagined take on one of Square Enix's most popular games ever, and it's a positive one: according to a report from Famitsu, the controversial cross-dressing scene involving Cloud will return in the remake. Final Fantasy 7 Remake actually features a lot of content that could be considered problematic or insensitive, as the game essentially spotlights a group of eco-terrorists as heroes before elaborating on what caused them to go to such extreme lengths, but in today's gaming climate most of the game is likely safe.
That said, if there's anything that could cause a stumble for the game—aside from a slur that has somehow managed to remain present in ported versions of the game—it's Final Fantasy 7 Remake's cross-dressing scene. In the original 1997 version of the game, Cloud, Tifa, and Aeris need to infiltrate the mansion of a famous seducer known as Don Corneo. Corneo only lets women inside his mansion, though, which leads to a series of mini-quests that get Cloud to cross-dress as a woman. In the original game, it's portrayed as comedic, which is something that could be tough now that the video game industry has evolved to be much more inclusive and sensitive to these kinds of problematic representations.
Luckily, however, the Final Fantasy 7 Remake cross-dressing scene has been described as being modernized in the report from Famitsu (via Eurogamer). According to that report, Square Enix has an ethics department in place for Final Fantasy 7 Remake that has already caused some major changes to the game, including reducing Tifa's bust size so she looks more natural during action sequences. This led to the widely-praised character re-design that gave her a more realistic build for a fighter and fitted clothing.
The report notes that the Final Fantasy 7 Remake cross-dressing scene is now more "modern," so it's possible the lens through which its viewed is no longer with intent to ridicule the practice. The game has been modernized in other ways, too, with new, impressive combat and character designs, alongside a reinvigorated story that will help explore characters who didn't get as much screen time in the original.
We'll have to wait until March 2020 to see how Square Enix has reimagined the Final Fantasy 7 Remake cross-dressing sequence, but it's likely that a combination of the ethics department and a longer stay in Midgar will benefit the scene immensely. It sounds like Square Enix is treating this with the right amount of caution, and with more space to breathe—Final Fantasy 7 Remake is a full-length game set entirely in Midgar, while the original game only spent about 5-10% of it's total run-time there—there's every reason to hope the new take on an infamous classic will be handled with the appropriate amount of class.