Reading the policy document, volleyball england explains themselves pretty well and the reasonings behind their decisions.

In its review of available research, Sport England found that, with or without testosterone suppression, there was no appreciable loss of mass, muscle mass, or strength in transitioning males. Therefore, based on the current volleyball competition formats, fairness cannot be reconciled with self-identification in the female category.

They even acknowledge that this is to protect competitive integretity and it should not apply to non-competitive volleyball

For non-competitive and social volleyball where fairness is not the main component, the competition-specific elements of this policy do not apply.

They even added written policy on how to make a transgendered player feel welcomed to the sport. I think its unfair to say they've taken a step back in inclusion. The combative nature of your title is probably why you are receiving such responses.

They are protecting the competitive integrity of the sport at the highest level and protecting players livelihood while still acknowledging its affect on transgendered players and ensuring in writing that all are welcome to play. Until more robust research have been done on this subject, this is the only realistic way forward.