I would say the following two sentences from the abstract are the crux of the matter:
“Androgen deprivation of M–F decreased muscle mass, increasing the overlap with untreated F–M, but mean muscle mass remained significantly higher in M–F than in F–M.”
In other words, treated MTF TGs ended up with muscle-mass levels that overlapped with that of cis-gendered females, but the mean muscle-mass level in the MTF group was statistically higher than the mean in untreated cis-gendered females. (If you can open the PDF and check out the graph on the bottom of page 427, you can get a better sense of how these findings can co-exist.) This finding supports the argument that, to the extent higher muscle-mass levels provide an advantage in a given sport, the average MTF TG will have a small-but-significant advantage over her cis-gendered competitors.
But, the authors go on to point out:
“The question of whether reassigned M–F can fairly compete with women depends on what degree of arbitrariness one wishes to accept, keeping in mind, for instance, that similar blood testosterone levels in men have profoundly different biologic effects on muscle properties, rendering competition in sports intrinsically a matter of how nature endows individuals for this competition.”
The authors unpack this in the Discussion section:
“In real life, there will always be an element of arbitrariness in the drawing of competitive lines. Different individuals are born with and develop postnatally different potentials. The caprices of genetics and postnatal development will make any form of competition intrinsically unfair at some level…[I]ndividual differences in response to androgen administration might reflect differences in activity level, testosterone metabolism and nutrition, or polymorphisms in androgen receptor, myostatin, 5a-reductase or other muscle growth regulators, all genetically determined and inherently personal. The implication is that all men and women are not born equally endowed for competition in sports.”
The point being, there is enormous inter-individual variation in response to test–variation which results in a lucky few individuals having an advantage in strength-dependent sports. From a sports-performance perspective, the relatively small inter-group difference in muscle-mass levels that exist between cis- and trans-gendered women may well be swamped by these inter-individual differences. And since we are willing to accept the advantages conveyed by inter-individual differences, it makes little sense to reject the small average advantage MTF TGs enjoy.
Edited to correct an error