TL;DR:

This bill’s proposed amendment NC21 would out trans people. It was rejected by the MPs, but the House of Lords have effectively appealed this.

However, the article claims that even if this amendment isn’t in there, the bill itself is dangerous, allowing the government to reintroduce these effects even without the amendments, by allowing itself to define how and what data needs to be shared by verification providers.

It would do so at its own discretion, without further legislative scrutiny.

This is saying that digital verification providers would need to record the sex of the person they’re verifying the identity of. That seems logical since gender can be changed.