It's really for the parent's egos more than the child, unfortunately. They want to make sure people know if it's a boy or a girl at a glance. But it means the child gets less choice about what they play with and are exposed to at a young age.

There aren't laws restricting what they can play with, but society tends to think of certain items or occupations or concepts as more masculine or feminine, so it tends to influence what people give a child. Farm equipment, cars, military or police items, sports, and active toys are usually designated as masculine. Make-believe things like fake food, play houses, and costumes, plus things like dolls and books, horses, and professional dancing tend to be considered feminine.

It's idiotic, and we're working on breaking down that binary, but there are markets that don't want it broken because it helps them sell more products.