I’m sure muscle diminishes rapidly after MTF transition, but humans are just very good at losing muscle. Height and hand size are not things that go away after transition. Basketball is obviously one of the sports where MTF people have a massive advantage, although I don’t know of any studies on it. It depends massively on the sport.
Of course in professional leagues everyone is genetically unique. Saying “no this particular genetically unique person is unfair” is a bit weird.