Identity markers are vital for the safety and security of everyone. They should represent a fair and accurate means for an individual to provide for all legal purposes. Gender markers are part of the system for placing a state run category tracking label on individuals. Are they who they say they are? Ones genitalia are seldom at issue in determining this identity. A person's body is private. To deny a person the official document that affirms them in their gender is critical for employment, among other aspects of day to day life. To place this added burden on people to have to expose their personal and intimate details of their bodies is not just intrusive, it can have catastrophic impact on their ability to earn a living, if a question of "who are you really?" arises.
How does this change cause harm? Who has the right to disclose such personal information? Only the individual. Not the state.