This I don't think is right. This debate polarises people just like all big debates do (Brexit, anyone?) But the answer isn't at the extremes is it. The answer is never going to be at the extremes. It isn't "tough cookies, you think trans women are women so that means you think Karen White should be in a women's prison come hell or high water", just like it isn't, "tough cookies, you think trans women are men so that means you have to send 70 year old Isla who transitioned 45 years ago (including full surgical reassignment) to a men's prison for losing control of her car and hitting a pedestrian".*
Calligula I think we all started wanting compromise. The problem is that the compromise is only coming from one side. First they wanted to use transwoman, no more. Than they wanted woman, they'd leave female alone. Now they want female. Some are even saying they should be called cis!
It used to be that we had an unofficial agreement of pretence. Now police are called for misgendering. Any compromise we give is jumped upon and the next thing demanded. Because of all the demands, and that nothing is ever enough, we are being forced to take a hard line. We can no longer do a case by case basis because of the way it is exploited.
We have been nice for too long and this is our reward.