Something like waiting until male puberty is already pretty far along and doing extensive strength training and then transitioning and competing immediately in a sport that puts a heavy premium on strength. I think most sports already have rules that would prevent this.
For someone following a more normal transitioning trajectory, there would be zero advantage; probably a significant disadvantage.
A blanket ban is just pure bullying, especially for childrens' sports (which are primarily a social activity, not a consequential competition). Individual sports can have rules to prevent the (primarily hypothetical) abusive cases without preventing children from participating in normal social activities. No one is saying that someone who's 200 lb of solid muscle and started HRT a month ago should be able to compete against girls in football or powerlifting, but pickleball, sure go for it.