A thoughtful question with a compassionate point of view. I will try to respond in a similar manner, but with a slightly different take.
Imagine a typical young woman in high school who plays a semi contact sport (field hockey, basketball, soccer), weighs in at 110 – 120 lbs. at 5’4” to 5’6” with the muscle mass, strength, and speed commensurate with a top notch female athlete. Now she has to go up against a born male identifying as female athlete, weighing in at 160 to 180, 5' 8"to 6'0", male muscle mass ratio, strength and speed of a top notch male athlete. She will be knocked down repeatedly, outmuscled repeatedly and beaten to ball/goal over and over again. She will be beaten and humiliated. How would that father console his daughter, possibly from a hospital bed? Is she better off for having competed in an unwinnable game, or should that game never have taken place?
Setting aside scenarios that can play on our emotions, what your post is looking for is fairness for all. In the real world that is an unattainable goal. Within each gender hormone output of an individual will like many traits follow a bell curve. Life isn’t fair to the males or females who fall to the far left of that curve nor, sometimes, to those who fall on the far right of the curve.
I have sympathy and respect for anyone who is hormonally an outlier. That would make the already difficult teenage years near impossible. I also have sympathy and respect for any who was born to one gender, but believes they are the other. I can’t imagine how difficult that life must be.
But I also know that I would not want my daughter competing against a born male in a semi-contact or contact sport.