Call me weird but I think several very simple principles apply:
1. If only for the sake of politeness, people should be referred to in the manner they themselves wish. If a Susan wishes to be called Sue, or Sam, or even Henry one should do so. If someone you believe looks very masculine wishes to be called Sue and viewed as a woman, or use the pronoun “them” fine, do so. It’s no skin off your teeth, it’s really none of your business, and most importantly it’s the polite thing to do. And surprise, Sue may be a cis-woman after all (see point 2).
2. Biological set is not binary, as explained multiple times upthread. Size and shape of genitalia, levels of sex hormones, etc, vary widely even within cis males and females.
3. When I think of my sex/gender it involves what I think. I don’t glance down to determine it, even though by convention my body more or less matches my thoughts on this. I can fully understand how some people think of themselves as a sex/gender different from what someone else might assign to them on a physical glance. Or even the number of Y and X chromosomes they have. Do we all know our own karyotype? What they think of themselves is more important than what other people think of them.
4. I don’t see how someone coming out as a trans-women diminishes in any way the “value” or “worth” of cis-women, or their struggles for equality. This reminds me too much of the old idea that gay marriages would somehow invalidate straight marriages.
There are knotter issues, involving sports competitions, etc. But I thought I would start off with the conclusions that I believe are straight-forward.