Just blocking the community doesn’t prevent the users in that community from harassing minorities and generally spreading disinformation and hate. It’s offloading extra moderation work to every instance who federates with them. Unless that instance is also okay with fascists interacting in bad faith, of course.
This argument is irrelevant in the end because trans women are women. Even if it were true that some trans women have a net advantage due to having gone through a male puberty, It’s okay to have biological advantages in sports. That’s kind of the point of sports, no? As long as they’re taking hrt to get rid of the bulk of the advantages a male body brings I don’t see what the issue is.
The second you exclude trans women, it is no longer a women’s division.