That amendment only designates who can represent the district, but does not define the district or Congress' powers to change that district. In fact, it muddies the water further by stating: "The Congress shall have power to enforce this article by appropriate legislation."
It establishes 3 electoral votes for the District, that would remain with the District after it is broken off to form the new state. An anomalous result, as a small handful of people - the First Family - would have 3 electoral votes. This would violate one man, one vote that is the basis of Congressional districts and allocation of electoral votes, and is why the dems’ own proposal calls for a constitutional amendment.