Reading that makes me think this case is more linked to transgenderism than I realised.
Is an XY athlete with one of the more severe DSD conditions technically a male with a female gender identity and legal sex? Their gender identity has been more socialised in than many later transitioning trans people as they were assumed female at birth. They may have some feminised aspects to their body which are natural rather than caused by artificial hormones or surgery. If we are going to insist on binary sex characterisation though this person is male.
No sex is not a spectrum, the vast majority of people are clearly male or female with no question about it, however gender non conforming they may be and whatever their identity.
But I feel like we may need to acknowledge that certain extremely rare conditions do form exceptions to the binary. For this extremely rare exception, maybe is it most appropriate to say what sex you are deemed to be or whether you prefer to just deem yourself "intersex" is decided in consultation with your doctor based on your own sense of identity. I'm really unsure what the best way to think of this is to not offend anyone with these conditions but also not to buy into identity politics or sex as a spectrum.
Sports need to decide what they need to do to function re eligibility. That's a separate issue, maybe more akin to Paralympics categories.