Also, yes! There’s a solid argument that prisons should only be used for individuals that are too dangerous to be roaming society, and only then until they’ve been rehabilitated, where possible.

That's what countries of northern Europe (Sweden, Norway) do. It turns out it seems to work.

It’s part of why all the recent fuss about a trans woman with a history of sexual violence being housed in a women’s prison was a bit of an overreaction: she was kept in a segregated wing and never actually had any contact with other prisoners. That said, there are questions about whether she was genuinely trans, because she was a rapist who started transitioning after being convicted - I do believe that when someone with a history of sexual assault transitions in prison, it’s a reasonable to ask a lot of questions.

Yes, no matter what progress we do, there will always be people trying to take advantage of it. With time, a culture will develop around those issues, and the exploits will be mitigated, but for new advances such as trans rights, this is to be expected.

But whether she was being honest or not, she was never in a position to actually hurt anyone, and moving her back to a male prison would also require she be segregated from the general population.

Yes, that is another good point for keeping trans inmate separated.