I dunno, the three month thing is a carrot to shut up the TRA's "but, look, we're reducing the time you have to wait" - I bet it doesn't make it's way into law.
It's fair enough too, either we have a self declaration because there is no need for medical opinion, or, we do need medical review because there is an overlap between gender confusion and other conditions. And, anyone who is dysphoric is, by definition, having mental health challenges so what Kezia Dugdale meant with "they are not ill" is bemusing.
No one is saying that being trans is a mental illness. But, it is true to say that an awful lot of trans people also struggle with thier mental health. And that needs to be discussed and accounted for when making laws ad providing services.