It is why self-ID is so important to the trans lobby.
Stonewall talking about it as "just a bit of admin".
But what it does is set a precedent that self-defined feelings (that anybody can merely claim to have) trump material reality in law.
So for example, if we take the case of the NSPCC guy who was wanking in the NSPCC offices in a rubber gimp suit and put in on the internet to brag about it.
He would be able to legitimately claim that his fetish identity should never be grounds for dismissal. That his identify is part of who he is and that he should not be discriminated at work for it. Indeed, he can take legal action against NSPCC for victimising him if they invoke disciplinary proceedings against him. That's what would happen if we enshrine self-declared identity in law.
Hell, he is probably already claiming that now.
If Philip Bunce can present as Pippa Bunce at work then why can't NSPCC guy wear a rubber gimp suit and masturbate at work? That is his fetish identity. Bunce brings one identity to work and NSPCC bloke brings another. How does the law distinguish between the two? The sexual element is absolutely core to this guy's fetish identity, so why should he be less protected in the eyes of the law than Bunce?
As a wider point, let's ask ourselves where does that all that leave safeguarding of children?
Individuals and organisations will be effectively prohibited by law from taking any action whatsoever against any individual who self-identifies as woman or fetish. Even asking a question will be a hate crime.
Society will still be able to prosecute those who abuse children. But it will be prevented from taking any action to stop it happening in the first place, indeed society's new laws will facilitate the abuse.