It’s not that cut and dried. She was tested by the IAAF several years ago and they continued to let her compete as a woman. She is not a man just because XY chromosomes are in play. She is intersex, a condition that some 1 in 2000 babies are born with. Being naturally born intersex is not really different than being naturally born with bigger than average hands and feet. It’s just that we live in a society that is obsessed with binaries.
There’s no guarantee that taking hormones will bring down her naturally occurring levels of testosterone which are due to hyperandrogenism (not to being an actual man), so they are in essence going to probably ban her and other athletes like her from being able to complete at all.
Race is absolutely a factor here, just as it was in the 1960s and when very tall Black men began to dominate basketball and a bunch of new rules were instituted to mitigate that.