Perhaps it's better to presume they did not know. My former art schoolmate's parents knew. Apparently, the doctors said she was more girl than boy, even though she had exterior presenting infant male genitalia. But, dad wanted a boy; so they raised her as a boy. They even tried to have her institutionalized when she transitioned.
Thankfully, after she ran away (her words; I'd say escaped), she eventually made her way to a native reservation where she was given refuge and welcomed as one of the Two Spirit People. They even funded art school for her, which is where we met.
I really don't know any more about her situation. We only hung out that one quarter. I was very young and didn't keep contact when I transferred to a different school in another state.
But, I know she was deeply wounded by her parental relationship.