We'll see how this plays out, but this may have been a very good ruling, in that it does not redefine the concept of sex. The idea here is that an employer cannot discriminate against a male who identifies as/presents using cultural gender stereotypes of a woman. But this is because the employer would be treating that person differently than a female who identifies/presents using cultural gender stereotypes of a woman; i.e., discrimination based on sex. The ruling is not saying that transgender person is the sex that they identify with; in fact, it has to be read as the opposite, otherwise the argument that it is an example of sex discrimination falls apart.
Now, that is for a general employer. There are already exceptions in place where discrimination based on sex are allowed, such as women's sports. Those exceptions remain, and as sex has not been redefined to be based on personal identity, women's sport can continue to exclude males regardless of how those males personally identify. The trick being that while leagues are allowed to, that doesn't mean they have to, and as you mentioned, some organizations are going with the flawed identity metric based on extremely poor reasoning with the obvious injustice following.