The transgender bathroom issue hasn't disappeared. It's just that we don't hear about it as much since the Obama-era "Dear Colleague Letter" has been withdrawn and the highest-profile case—Gloucester County School Board v. G.G.—has sunk from view. But just last week the Supreme Court of Missouri heard oral argument in R.M.A. v. Blue Springs R-IV School District. This case relies at least in part on state law (specifically on Missouri's Human Rights Act).
The Blue Springs case is similar to Gloucester County case in the sense that it involves an anatomical girl who psychologically identifies as a boy and wants to be permitted to use the boys' bathrooms. It is the female-to-male cases that tend to get litigated. They are thought to be more palatable to judges (and the public), since boys' sense of sexual privacy around anatomical girls is less likely to be viewed as a problem. But a real Title IX issue would exist if a school district had a policy of allowing female-to-male transgender students use the boys' room without also allowing male-to-female transgender students to use the girls' room. So courts will need to treat them the same.
R.M.A. went so far as to get a new birth certificate issued with the sex changed. But like G.G., R.M.A. remains an anatomical female. While the Blue Springs School District allows R.M.A. to play on boys' sports teams, it drew the line at bathrooms, locker rooms and showers. Instead, it decided that R.M.A. should be assigned to a private bathroom, locker room and shower. The trial court decided that the school district had acted properly and that R.M.A. was not entitled to be given exactly the same treatment as anatomical boys.
Back in 2016, the Supreme Court initially granted Gloucester County School District's cert petition in G.G.'s case. But when the Trump Administration withdrew the notorious Dear Colleague Letter that commanded federally-funded schools to assign self-declared "transgender" students to the bathrooms, locker rooms and showers of their declared "gender" rather than their anatomical sex, the Court vacated the judgment and remanded to the Fourth Circuit. In turn, the Fourth Circuit remanded to the trial court to determine if the case was moot on the ground that G.G. was now an adult and no longer a student at Gloucester County schools.
For the reasons I explain in my amicus curiae brief (with Peter Kirsanow) in Gloucester County School Board v. G.G., I am confident that Sessions did the right thing under federal law. Title IX specifically allows schools to separate students by sex for the purposes of bathrooms, locker rooms, and showers. We could argue about what "sex" means until the cows come home (though I think that argument is fake), but it doesn't matter, because the separation is permissive, not mandatory. Schools can separate students on the basis of astrological sign, first letter of their surname, or anatomy if that is what they prefer. Title IX does not interfere with their flexibility.
But now the issue is in state court and state laws will be at issue. So the beat goes on.