Now to actually answer the question! Where does gender come in?

At some point during the development of human social organisations – Engels argues that it happened at the point when the concepts of private property and inheritance were established but we don't have to agree with him – humans understand that, even though any person's individual relation to the means of reproduction is not uniform, there are broadly certain "kinds" (or classes) of people that relate to the means of reproduction similarly. In other words, a certain class of person is typically tasked with a certain share of reproductive labour and has a certain say in when and how reproductive labour is performed. The number of these classes and what being part of a class entails exactly varies between regions, cultures, and time periods but in the Western tradition we have the two classes that are familiar: one that makes most of the decisions and one that does most of the labour.

The emergence of the different classes of people in the social organisation of reproduction based on their relations to the means of reproduction gives birth to a self-perpetuating class system in which class division is maintained with social pressure and violence. This class system is what gender is. Over the course of human history, the basis of this class system, that is, the relations to the means of reproduction, serves as fertile ground for building a cultural, vibes-based understanding of the classes. Is it a coincidence that those who make most of the decisions are expected to be assertive and blunt while those who must obey the decisions are expected to be submissive and meek?

One of the ways class division is maintained in this system is by making sure that the boundaries are never crossed. There are various approaches to this, e.g. barring a whole class of people from education, but the topic of this conversation is sex so I'll talk about sex. While sex as a concept has been useful in scientific research, within the context of the gender class system it is consistently used to "brand" a class of people with immutable characteristics. In this context, sex is the gendering label assigned to a person to ensure class division. In this context, sex is not based on "physical reality" but on whatever is more convenient for the goal of ensuring class division – see the awful example of the way Imane Khelif has been treated.

When we refuse to be confined by the gender class system in whichever way – crossing the boundary, rejecting the boundary, or rejecting the entire system altogether – we also reject the enforcement of gendering labels. Since sex is this enforcement manifested, there is no distinction between transgender and transsexual.