I've met people who switched back and forth. And more who genuinely enjoyed having sex with people of both sexes. I can assure you that bisexuality is a real thing.
As for segregating bathrooms by gender presentation, that's atually what we do now. Most people don't think of it like this, but, of course, nobody checks your genitals at the door. Trans women who "pass" have been using women's bahtrooms for decades without incident.
The issue is the idea that now, any male who says they're a woman is immediately entitled to access women's spaces regardless of how they look.