Usually a more respectful term is biologal sex rather than biologal gender, since gender is usually understood to be the social/internal sense, whereas biological sex is chromosomes, hormones, sex characteristics

As for the point, it might be dysphoric for a trans individual to compete in a single gender team with people of a different gender to them, since it would imply they have a different gender than they do, which is misgendering them.

Also, even to group it biologically, transition changes a lot of your biological sex characteristics, hormones changes secondary sex characteristics such as breasts, muscle strength, body hair, fat distribution, and voice depth in addition to the hormonal makeup of your body, primary sex characteristics (genitals) can be changed via surgery, which only leaves chromosomes, and internal reproductive organs, neither of which make a meaningful difference in sports, while the other things do make a bigger difference