As someone who works with legislation a fair bit, I'd add that the GRA is really badly drafted - the way "sex" and "gender" are mixed up without defining either, and the way "for all purposes" is followed by a number of exemptions where the transsexual person with a GRC is explicitly not to be treated as a member of the target sex.
A lot of this filters through into the EA, where the PC of GR casts a wider net than the GRA, by including people undergoing or proposing to undergo gender reassigment. My best guess is that this was drafted with the assumption that the people with the PC of GR would be on pathway, probably including surgery, that would conclude with the issuance of a GRC.
But anyway, yes, we've got this concept of legal sex explained in a not very articulate way by our learned Prime Minister. I assume our legislators mostly didn't see a clash with biological sex, or they thought the numbers were so small it was manageable.
Then, as @theilltemperedqueenofspacetime says, society moves on and we have loads of people asserting a trans identity who don't fit into the gatekept process envisaged by the GRA and EA.
So what do you do?
The law seems pretty muddy, so the EHRC attempts to provide guidance, but most businesses and public bodies are following Stonewall law on the principle that the more you pay for a dodgy antique, the more you'll be inclined to believe it's genuine. And also because the SSEs seem to be much more complicated than they should have been.
When it comes to clarifying the law, which is going to happen eventually, it then becomes more zero-sum. One simple and elegant solution (though terrible in its consequences) would be to adopt Stonewall law and say, where the law says sex it means gender identity, ergo there's no conflict.
OR
There's the line that the SC has taken, which is that the SSEs were written into law for a purpose, they don't make any sense if they're not based on biological sex, ergo (because the same word means the same thing in the same piece of legislation) the trans movement's Humptydumptyism is not a workable method of statutory intepretation and TWANW at least for the purposes of the EA and associated bits of law.
Which still leaves us with the two categories of biological sex and certificated sex, and it's up to Parliament to reconcile those if it wants to. But as things stand certificated sex looks like a zombie status that doesn't confer any right to spaces or services covered by SSEs, which, let's be honest, is what self-ID was all about.