Earlier quoted context omitted.
Why not find a set of rules that works for 100% of people instead of leaving out the 1% for no other reason than "we have to continue with the rules we established as tradition".
Because there are no such rules. It's a competition. Only a few people can win, and any rules are biased. If you rolled back the clock and tried again, Michael Phelps would never be a champion weightlifter, and the best weightlifter would never be a champion swimmer.
Currently for olympic distance running at 400 meters or further, a female must present with a certain maximum level of testosterone. This rule was specifically made to exclude an intersex female-presenting runner who excelled. Due to medical complications, she cannot take medication to surpress her testosterone levels on a long term basis.
So yes, such rules exist.