I doubt that’s what the legislation says. There is a lack of information in that article, but I bet it would simply require them to participate in sports according to their birth sex.
You are right. The article is a lie. They can participate in sports according to the gender on their original birth certificate.
Sports rule in Texas:::: stay in your “birth” lane.
To put more information in the article would endanger the bias. Used to be that an editor would spike such an inaccurate article, or keep pushing it back down for confirmation from sources until the dumbass who wrote it would get the message, but nowadays... all that matters is a clickbait headline.