Haha, nah, there's no sugery that makes him biogically male. He's just simply transgender. Yes, it does seem like a bug how even as a female you can have kits.
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I mean, there is a surgery (at least with humans) that could make him biologically male, but are you saying he hasn't gotten it? Either way, the kitting mechanics, specifically dialogue, are very out of whack. To be fair, I've had kits with Nightlight as a female and she also says that she's pregnant, so assuming Moose hasn't had surgery, it may just be a bug with that sort of relationship (excluding Breezestar).