"In terms of casting the character - in the book, Molina is described as a homosexual male, in prison for soliciting sex from minors. I suppose if we look at the character's gender through the lens of today, perhaps he might be nonbinary, but if set period, I don't know the character would fully identify in that way at that time."
Right, this is how I feel. In the book, much is made of the fact that Molina is "a different side of being male" than Valentin. Casting the role transfemme, I feel, complicates things further which wouldn't be true of the era (and it seems, for many reasons, that it would be hard to make it contemporary) but also makes Molina a different character which the text of the musical doesn't support. There also seems a bit of a push for effeminate gay men depicted in the media right now to be shown as trans or nonbinary--a fear that they're not being true or authentic to the character if they don't. Which, I just don't think is the reality for Molina in the musical or even more clearly in the novel (although I admit the novel is far from clear on a lot of things.) Or true for many effeminate gay men who still worship and relate to female diva roles and performers.