FIDE has two competitive circuits - the open circuit where men and women (cis or trans) can compete, and the women's circuit. Players can (and commonly do) compete in both circuits. Ultimately the goal of the women's circuit is to boost recruitment of female players and make competitive chess less of a boys' club. Opinions are divided on whether it's the most effective method.
The recent decision affects AMAB people who want to play in the women's circuit, but does not bar them from the open circuit.

It's a pretty shit decision as far as I can see, but it's good to make judgments on the facts.