I wouldn't call it cheating. But I have no trouble drawing lines that exclude some people, if that levels the field for a bigger group. In this case the female olympics would soon be known as the intersex olympics given the selection pressure. I can understand the decision to make the competiton more interesting by barring intersex people. No need to frame it as cheating though.
Since we don't actually do genetic tests at birth, this would only ocurr in the context of national qualifying, think about what the experience of someone who trains to be good enough to qualify for the Olympics, then gets this test and is told, "Sorry, you aren't really a woman. Too bad. No Olympics for you. Sorry you wasted all those years training."
How else should the person who just got that information interpret it except... Sorry, you're not really deserving, even though your score qualifies you. And what do call someone who has a score that qualifies but doesn't get to go?
And there are far more of people with this experience than the experience of being born and treated by society as a man and becoming an Olympic athlete as a woman.