Well, it just seems like the body going through male puberty is likely a bigger variable than a swimsuit will ever be.
The thing about those against Lia competing is that they almost always phrase it in terms of the first justification (i.e., it’s bad for competition), but in reality it’s really more of the second (i.e., when we watch women’s sports we only want to see who the best biological females are).
The first justification really doesn’t make sense here for two reasons. First, the number of transgender competitors is extremely low, and so far even those who excel at the sport (Lia in this case) still face pretty tough competition at the highest levels. Second, the people making the argument don’t seem to have any desire to try to quantify whatever biological advantage there is, nor to regulate it in anyone other than transgender athletes.