This is a debate I have had with two Endocrinologists, one of whom taught Internal Medicine doctors in the specialty of Endocrinology.
First, WPATH guidelines and the hormone protocols established by the Endocrine Society state that the purpose of hormone therapy in transgender individuals is to "maintain sex hormone levels within the normal range for the person's affirmed gender".
OK, Doc. Let's go back to Human Reproductive Biology 101:

As you can see, hormone levels are not in a steady state. So why are hormones prescribed in a steady state and not cyclic like the human body?
Because transgender women do not have a uterus. The fluctuations in hormone levels serve as signals in the body to perform various functions in the uterus to prepare for menses or pregnancy. Birth control pills came in packages of 28 pills. 21 of which contained a synthetic progestin and 7 were placebo (sugar pills). This was to mimic the 28-day monthly cycle (see graphic above).
OK, so these hormones ONLY affect the uterus and do nothing else? No, that isn't true either. These hormones play a crucial role in BREAST DEVELOPMENT and maturity, something that transgender women are interested in achieving, right?
Estrogen develops the internal structures of the breast, the ductwork leading to the nipple, and deposits fat to cause the breasts to elongate. Progesterone develops the alveoli (milk glands), which causes the breast to become fuller and rounded.
What happens during pregnancy? Both estrogen and progesterone rise together to very high levels, sometimes 10 times higher than baseline. This signals the breasts to get ready for lactation and the feeding of a newborn. The breasts begin to grow, develop, and mature much faster. What would have taken years of puberty now gets done in nine months.
When the baby is delivered, the placenta (which was producing the high hormone levels) is delivered and can no longer provide this function. The rapid drop in hormone levels signals to the breasts that it is time to start producing milk. Prolactin causes milk ejection, but progesterone blocks this while the breasts are developing. When progesterone levels drop postpartum, prolactin is no longer inhibited, and lactation can occur.
So, it would seem to me that fluctuating hormone levels affect more than the uterus, and whoever designed the human body had a reason for these fluctuations. Does that mean that a steady dose is bad. No, not at all. But if the goal is to "maintain sex hormone levels within the normal range for the person's affirmed gender" perhaps mimicking the same cycle might prove beneficial.
Cyclical dosing of hormones has long been accepted in the medical community (as in the birth control pills mentioned above), but is only recently being investigated as an approach to treat menopause. Perhaps, studies may show that it is equally beneficial for transgender people too.