Individuals with the protected characteristic of gender reassignment also typically have the following protected characteristics:
Belief (gender identity theory)
Disability (a compelling psychological inability to use the services intended for their own sex)
Sex – actually, case law says that having different dress codes for the two sexes is not illegal discrimination; but this could be changed if we really wanted to. Employers can still impose decency codes.
Nevertheless, I can still see a reason to protect Individuals from being denied goods, services, employment, or accommodation because they are, or are perceived to be, transgender, even though they have other protected characteristics to call on for protection.
(Nor do I see any difficulty arising from the fuzzy edges of 'gender reassignment'. GNC individuals are covered by perceptive discrimination protection, for example.)
The reason to keep this protected characteristic is political – it's a sop which is required for the time being because of the persistent existence of people who believe themselves to be transgender, and their misguided allies.
Because of increased sex equality (marriage, tax, pensions) since 2004, the only remaining laws that distinguish on sex are those that derive from physiology, and therefore can't accommodate the legal fiction of a 'sex change'. The GRA is therefore a dead letter: protection from anti-trans discrimination is all they've got left. Do we need to look vindictive?
(That's not to say that the concept of anti-trans discrimination hasn't had malign outcomes. It's been used for years, wrongly, to suggest that the following are all either illegal, or sufficiently antisocial to deprive the perpetrator of protected belief status:
Expressing GC beliefs.
Treating people in accordance with their sex, rather than their acquired gender.
For example, stopping someone with the acquired gender of female from benefitting from a women-only shortlist, educational or employment opportunity, service, or association.
And, not treating, as female, someone with the acquired gender of female, for the purposes of specific regulations such as those governing prisons, workplaces, and schools.
None of these things is anti-trans discrimination, and the government needs to start saying so.)