Yes, I think the proposed trial is unlikely to answer the most clinically relevant question and, given the timelines involved, may expose participants to unnecessary harms.
Puberty blockers are intended to be initiated at around Tanner stage 2. If treatment does not begin until age 14, many young people—particularly natal females—will already have undergone a substantial proportion of endogenous puberty, limiting one of the principal purposes of the intervention. Starting blockers at that stage or later also means suppressing an already established pubertal process, with its own physiological consequences (it can introduce very challenging side effects akin to a sort of menopause).
Equally concerning is the proposal to keep young people on blockers until age 18. Four years of pubertal suppression during adolescence would be challenging both physically and socially.
If the aim is to protect young people's welfare, I don't think the answer is to eliminate hormonal treatment for those with persistent gender dysphoria. Rather, it is to ensure that appropriately assessed young people receive treatment on a medically and developmentally appropriate timeline, as occurs in a number of other healthcare systems, rather than one determined primarily by policy / political compromises.
As for your final question: no, of course children wouldn't develop fertility if they don't have the relevant reproductive organs. Nor would they be left in a permanent prepubertal state, unable to grow into a mature adult with a sense of self, and permanently affected by brain damage. As I've explained, there are many groups of children for whom puberty is induced through exogenous hormones; regardless of chromosomes, hormone receptors respond to these hormones which drive systemic pubertal changes (including those associated with bone health and brain development) even if they can't grow new reproductive organs.