If it were up to me, they would keep existing as they are now, the only difference would be that they would be listed as their biological sex in legal documents. At most as people of their sex presenting as the other sex (but still not considered legally part of their preferred sex/gender). I don' t really care much if trans people inform any person they meet of their status, all I care about is that they are not legally listed as their preferred sex and that they inform sexual partners of it: not disclosing would be considered rape by deception.

I also don' t care if trans people are read as their preferred sex or if other people decide to follow their requests and call them their preferred pronouns/labels: in short, I don' t care if you call yourself a woman and your husband calls you his wife, I don' t care if you tell everyone that you are in a heterosexual relationship, and I don' t care if your family and friends, or even colleagues or random people on the street call you a woman. What I care about is that, legally, you aren' t recognized as a woman. Male who presents as a woman (or whatever other euphemism that means that)? Sure. Woman? No.

This obviously has consequences in the real world, which would be addressed. Like sex segreated spaces: there would be co-ed or even trans-exclusive/neutral spaces. Sports leagues? Same. Sex segregated positions? Same.

People would be able to choose whether to call trans people their preferred pronouns/labels without fear of repercussions.

As for medical transition, I don' t know which is best between allowing everyone who wants it to get it as a cosmetic surgery, or make it something that can only be given to someone after psychological evaluation. I think I am leaning on the former more than the latter, but anyway I wouldn' t ban it. Except for children: absolutely NO medical transition for anyone under 18.