Really? Welcome to the party.
What party?
Nothing is black and white, but boy howdy so many people think it is. What's going on with this example? There are plenty of people who think this swimmer is just some dude who just wanted to win a championship and gamed the system. If so, they've got some serious mental health problems. So what do you do if someone honestly wants to identify as the gender opposite their birth sex (fuck if I know how to write that in a way that doesn't work for someone in the trans community) but who still wants to compete? Maybe they just can't.
I mean, at one point in time the philosophy was that if you were a woman, tough noogies, you aren't as good at athletics as men, that's just biology, so you can't compete. Then we decided that women should have that opportunity, but they can't compete on the playing field with men, so we created women's fields. And over time we didn't limit them - adding women's boxing, pole vault, etc... a bunch of sports that were typically only available to men. There's still no women's NCAA football.
So yeah, allowing trans-women into women's fields is now taking one adaptation we made to give more equity and removing that equity to give equity to an even smaller group.
But I don't subscribe to the concept of people who say "THIS IS CRAZY!". If this swimmer really wants to identify as female, well, that's atypical but we should recognize that this is an atypicality that is going to be limiting for them and be empathetic, while still understanding that some of those limitations should probably exist.