OP, u/unpossiblie's post is honestly the best advice for this situation.

Your sis isn't abusing him based off what you've shared in your post. A CPS investigation would do nothing. If there is more to this story, you should edit your post with that information, and we can go off that.

However, we can only go off what you have said. It's already very clear that you are severely biased against your sister's worldview. That's fine-- to each their own. BUT you cannot step in over her parenting style. You've shared your thoughts, and they fell on deaf ears. You have to accept that.

The best thing you can do is provide the child with a space where there is no criticism for him to favor whatever toys he likes best. So, babysit and give him that space. Do not push either gender preference, or you'll just be doing the same thing as she is.

When he is older, he can enforce his choices and preferences more strongly, and eventually your sister won't be able to force her views on him, if that's what is happening.