Edit: In this comment I try to rationalize FIDE’s decision, but in my other replies I come to the conclusion that it hurts transgender people much more than it helps women as a group.
The “open” tournament is where the best chess player among men, women, both, neither, and everything under the sun can compete. In my opinion, everything outside of that the “who’s the best X” is based on arbitrary conditions of what qualifies as X, and doesn’t reflect on whether people in group X are inherent any better or worse than anyone outside that limited group.
Women and members of LGBTQ+ should be encouraged to join the chess world as it’s not a physical sport and anyone can become the best, so these rules support that. There should be a trans-person league as well if there’s sufficient interest, but FIDE has every right to make rules to limit who enters the “woman” tournament, without needing to imply that men are inherently better or worse than women at chess.
I absolutely understand that this sounds like a TERF-y line of argument even though I strongly believe trans women ARE women and vice versa, there are TERFs among women who wouldn’t want to take up chess because the space is so dominated by male players by the numbers. The “case-by-case” view is arbitrary to me which I’d like to see a more transparent process, but I think at the end of the day FIDE can disqualify anyone out of any tournament for any reason and this at least provides an avenue for trans women to potentially participate. Rule 4.1 that trans men lose their titles of “best woman” is consistent with the idea that trans men are men, because post-transition they shouldn’t be considered women anymore, by my understanding.
Anyways, I don’t mean to barge in to blindly spout transphobic views. In the spirit of healthy discussion I welcome people to disagree with me and give me insight on how FIDE can balance being more inclusive while promoting all genders to participate in chess.