Given the definition of gender in the 1972 Title Seven Act, I am not surprised by this as well. The administration will have to go to Congress to have the definition altered in any way before it can enforce the "guidelines." All this really demonstrates is that our legislative bodies are lagging behind once again in addressing issues facing the nation.
I think that would set a dangerous process. Pass a law. Then once the law is passed, define the terms favorably in a way that would have kept the law from being passed if it was that way at the beginning. I think if you want to have Title IX modified to include transgenders, the law needs to be scrapped and passed as law from scratch. To just "define" laws into different laws seems really skeevy and undemocratic.