Originally the basis and thinking for the GRA was that this was intended for transsexuals - ie people who would have surgical reassignment.
However, international law apparently means you cannot have a medical procedure a prerequisite for some right.
So they removed that and still said that it was primarily intended for transsexuals, and obviously they would all want to have surgery but maybe there might be some medical reason why they couldn't.
But nothing in the law itself has it as a requirement.
Concerns about this during GRA2004 debates were dismissed, because of the application process checks.
Lynne Jones in particular did this. Two quotes here:
To be candid, if the hon. Gentleman is suggesting that someone who sports a full beard would have their application for a gender recognition certificate granted, I wonder what world he is living in.
Does the hon. Gentleman seriously think that a trans-man who has not undergone phalloplasty would go into a male changing room, for example, with a football team and expose himself? That is highly unlikely. I can confirm that there are open women's changing rooms. I went into one just over the road this morning. Quite frankly, the idea that a male-to-female trans-person would be granted a recognition certificate if they did not undergo a penectomy is, again, unthinkable.