To a degree, I agree with her: if I were cis*, (either sex), I wouldn't want someone with different private parts to be near me, let alone those parts to be visible to me.
I have bad memories of jr high and high school locker rooms and the showers, even though we were all "equipped" the same. Bad things happened outside the showers as well.
As far as not taking PE and not graduating...when I was in tenth grade, I told my counselor and the principal that I would not be taking gym any more, thankyouverymuch. They filled that time slot with other classes, but it started me realizing I wasn't getting much out of school anyway (10th grade I scored very high on the SAT, better than most seniors), so by 11th I dropped out.
Guess what? The only place that was a factor was with the USAF... I scored in the 98th percentile, and the recruiter said, "ah, if only you had a diploma...well, you're going to have to get your GED later" (which I did).
TL;DR
I agree, under-18 male bodies and female bodies should not undress or shower together.
imho