I'll go along with Kelly. Since they made The Claim that you have to be "In Transition," I think it's reasonable that they define what that is! Since The Policy says nothing about Transition, they might be able to "make it up" as they go along, but legal will advise them that "making it up as we go," can be very dangerous.
One other question, do you work under a Union Contract? If it gets sticky, you might want to involve your Shop Steward.
I'm not a Lawyer, but I think they have a big flaw with their policy. It doesn't state "In Transition" anywhere. You can safely claim your transgendered, and that's what That Policy addresses.
It's your call, as others have said, "Do you want to go to War with them?" The only hope I can give you is that I have worked in management positions a lot, and yes; they often do take liberties and make policy on their own....when they shouldn't! This is often how they end up in big, fat, law suits....and that's what makes a lot of Plaintiff's Attorneys very happy!
Peace and Love, Joanie