We are all different, I have been on HRT for 7 years, and post op for 5 years, but I process drugs differently from other people. I am 72, and attend a gym class with people my age, and I am clearly the strongest in the class, including all the men. I know this, and would never compete in strength sports against cis women. This imbalance of strength is a dysphoria trigger for me, as it reminds me that I am not the same as cis women.
Australia currently has a Sex Discrimination Act which holds Gender Identity as a protected asset (though it is under heavy attack from the right wing), but it has a clause which exempts discrimination protection in cases where there is demonstrated unfairness or safety issues. This allows individual sporting bodies to make individual rulings on eligibility, and it has worked very well.
Community level sport is about health and engagement, and should be available to all. Elite sport is now about money. Physical advantage has been celebrated over fairness for hundreds of years. If fairness was the benchmark in elite sport, there would only be non gendered performance categories, so it is really about the spectacle, sponsors, and prestige. It makes sense that there should be differences in competitive criteria for the different levels.
Gender Incongruent sports competitors are statistically insignificant in all levels of sport, so the idea that they could have their own competitions simply reflects the proposers lack of knowledge. That it has become a publicly debated issue is clearly not about fairness in sport, but a right wing dog whistle for bigots and people who have no knowledge of gender incongruent people. We won't change the right wing, or the bigots, but we can bring about change in the people who simply don't know who trans people actually are.
Hugs,
Allie