The one thing I can say, though this isn't me supporting it or anything, but I can sort of see the reasoning behind the medical standards argument.
While deployed, access to medication and therapies are very low, they can have important life saving antibiotics and the like for wound care and such, but even something like having asthma excludes you, mostly because of the need of an inhaler and the likelihood, if deployed, of not having access to one when needed, is extremely high. (though I know asthma used to be an exclusionary medical condition for military service, not sure if that's changed over the years.)
As transmen and women, especially if transition, or have already transitioned, the constant need for hormones, especially for post-op individuals who are not longer producing their own hormones to take over if they don't have access to hormones can be bad. While that doesn't excuse the how low the US scored for Lesbians, gays and bisexuals as well, I do kinda see where they are coming from with the medical standards aspect, as if we are transitioning, we do need regular access to hormones.
That is my take on the medical exclusion at least, I could be completely off base here though.