I do think people should use whichever restroom they identify as, restrooms have privacy stalls.
If someone wants to use a locker room that matches thier identity, but not thier genitalia, they should be required to keep thier genitalia covered. Women should have a reasonable expectation that they won't encounter a p**is in the women's locker room, and while a va**na isn't as out there, it's still a good idea to keep a towel wrapped around thier waist in the men's locker room.
They are probably disqualified from women's sports, not based on biology, but on disallowed enhancements (hormone treatments).