As a trans-guy and athlete I see both sides of this one. On the one hand I say "go for it!" on the other hand I can see why it may not be the best idea.
From a physiological standpoint if she has not had an orchiectomy (removal of the testis) she will definitely have an unfair advantage. Along the physiological lines, her anatomy may also make others uncomfortable in the locker room as well as be made more uncomfortable herself, something I have personal experience with.
In my experience the more competitive the league the more likely it is that I am not allowed to play in it due to being on testosterone. My T levels aren't any higher than the average males on the teams but since it's synthetic its seen as an unfair advantage. In this case, hers would be natural, and therefore a potential, and more real, unfair advantage.
On the other hand, if you are female you should be allowed and welcomed in female specific groups or spaces.
Unfortunately those of us who challenge gender stereotypes tend to make some people very uncomfortable, but this is a two way street. It is neither fair for us to insist on being allowed when and where others will be made to feel uncomfortable, nor is it fair for others to exclude us and make us feel uncomfortable. This is the very trail gender variant individuals must continue to blaze.