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.
The law is absolutely unenforceable. Stupid, feel-good, knee-jerk legislation that accomplishes nothing except to force a national debate on trannies in restrooms that, as with other social issues, conservatives will lose.