Are you really thickheaded or just being deliberately obtuse?
There could be a situation where a biological male dressed and even surgically altered to be female goes into a women's restroom. If an employee stops or confronts him about using the women's restroom, the employee will have to somehow prove that person is indeed a man.
And then there is the possibility that the person thought to be a male is actually biologically female. If that is the case, the woman who appeared to be a man is going to have a civil case against the business.