Some of them look say, male, but they think they are female and wish to live as female. And vice versa. There might well be cases of people who are 100% male genetically but who wish to live as female - the ones I believe are being objected to in this thread - but the existence of the latter doesn’t negate the existence of the former; there really are people who are not definitely either male or female, and this isn’t a matter of their choosing.
This is the difference between hermaphroditism and transexuality. The latter is a mental illness. Hermaphrodites do not claim, generally to be transsexual.