My suggestion was to treat testosterone level as just anther criteria like weight. Above a certain T level, you go into the men's division. After that, for both the men's and women's divisions, apply weight criteria to further stratify the athletes into classes where the individual athletes more or less have equal opportunities for success.

We already apply weight criteria for the sports where that's appropriate, like boxing or weightlifting or wrestling.

We don't apply any other physiological criteria to segregate athletes that have biological advantages, though. There's no separate division for short swimmers and high jumpers, or tall gymnasts.

Nor, actually, do we apply those standards to many other competitions: there's no weight class for shot put, so you're going up against a 6'7" 320-pound Ryan Crouser in the Olympics. The overwhelming majority of people simply don't have the genetics to be able to meaningfully compete in that even - their genetics have doomed them to lose long before they step onto the field, or even start training.

Which clarifies the issue: all of these things reflect choices that we've made based on what we think is "fair" or "not fair" for a given sport, rather than some universal effort to balance the playing field so that anyone has a chance to win regardless of their genetics. These are all artificial divisions based on judgment calls, rather than the application of some extrinsic scientific assessment.

To bring that back to the main point, there's a baseline question of why (or whether) it is unfair for one female athlete to compete against another female athlete with higher testosterone, but not unfair if she has to compete against another athlete that's three inches taller than her? We don't let athletes take drugs to enhance their performance, but we're almost always perfectly comfortable with the idea that one athlete's natural physiology might give them an advantage over competitors - even an insuperable advantage, as with Michael Phelps' specific physiology (unusually long wingspan and torso, unusually large hands and feet, unusually flexible ankles and remarkably low tannic acid generation). Even though that means many athlete's dreams are crushed before they get in the pool or enter the ring - they're just going up against someone whose physiology gives them an insuperable advantage, but that's not unfair.