Cross-dressing is the act of wearing clothes typically associated with the opposite gender.
Throughout history, cross-dressing has been used for purposes of disguise. A common example would be the classic 'girl cross-dresses to join the army' story.
Cross-dressing has often been associated with homosexuality or being transgender. However, the term is not correlated to any sexual orientation or gender identity, and many cross-dressers are cisgender and heterosexual.
Rudy is a cross-dresser, and goes by 'Ruby' while cross-dressing. He first did so at the Halloween party in chapter 6, but as a joke. The others did not find it funny, viewing it as him mocking Rain and transgender people in general. However, he has since improved at passing, and has used this skill several times to help the others out.