I struggle with this too, but I keep coming back to thinking that the GRA and the concept of a GRC doesn't really make sense to me in the current context, except as a means of validating an individual's identity.
To an extent I'm not sure that gender - as opposed to sex - should necessarily have a legal standing. It possibly made more sense when the GRA was originally created and the definition of trans was somewhat clearer but now - when we have ever expanding lists of genders appearing which seem to be trying to put people in ever smaller boxes - I'm just not sure it does.
So I find myself thinking "what's the point of GRA." We have same sex marriage - I believe inability to marry was a major driver originally - so that's negated. It creates a legal fiction, but one which can be negated via the Equality Act exemptions if there is a valid reason to differentiate (as I understand it) so what does it achieve? It also doesn't seem to fit with the more varied concept of 95 (or however many) genders so how does that work? You can transition legally from M to F or vice versa, but if you're polygender you're stuck.
I also struggle to think of examples where you would want to differentiate on the basis of gender - I can think of situations where no differentiation is necessary at all, and ones where sex based is necessary, (which generally can be covered be the EA even if organisations don't) but not really gender based.
I understand that it's proponents would like to see it strengthened so that there is no legal difference between M&TM/W&TW, which of course many oppose, but in it's current guise what does it achieve in reality?
Sorry, that's maybe not much of an answer. It's a big, messy subject and a very tricky one to discuss.