When money is involved, the matter becomes much more complicated. There will be massive incentives for someone to play in a league where they can make the most money. But at the HS level, that’s not really a factor. Almost always a HS athlete playing on a team is doing it mainly for personal satisfaction. But even in HS, there can still be financial reasons like scholarships that may complicate things.
But in HS, the teams are structured in a way that would actually allow trans athletes to play no matter the amount of transitioning they’ve undergone without being too unbalancing. One factor is that schools are broken up into divisions based on their size, where 1A is a school with a few hundred students going up to 5A or 6A with thousands of students. And sports may have different levels based on ability, like Varsity, Junior Varsity, JVA, JVB, etc. And of course, trans girls may have varying degrees of medical transitioning to gender-typical performance. For the purposes of this post, I’ll use these terms:
P0 - Minimal latent AMAB performance. The trans girl has been on hormone therapy for multiple years and has hormones within typical AFAB ranges.
P1 - Some latent performance. The trans girl has been on hormone therapy for a short time or has hormones slightly out of typical AFAB ranges
P2 - AMAB performance. The trans girl has AMAB-typical hormone levels
The way I see this working is that the less amount of latent AMAB ability, the more competitive team the athlete can join. So a P0 can join the varsity team, but a P2 would be on the lowest level JV team. Since the varsity has the most competitive athletes, a trans girl should have gender-typical performance to be non-disruptive. It may seem odd that the P2 person would be on the low-level JV team, by my thinking there is that the JV players are going to have a wider range of abilities and will be more casual about sport. A AMAB playing in the girls JV team won’t really be a big deal since the JV teams are more about fun than competition.
But I also think that there might need to be handicapping based on the P0-P2 abilities. A P0 wouldn’t have any handicapping, but a P2 would be handicapped by having limits on how long they can play in the game, may have time added in a race, etc.
A system like this should allow all trans girl athletes to play sports. It recognizes that boys/girls sports are divided based around AMAB/AFAB differences and that trans girls will have varying amounts of medical transitioning which will affect performance. This will allow them to play without having their AMAB strengths be overpowering, disruptive, or controversial.