I agree with the model that the capability of the military outweighs social policy - if a social policy is damaging to military capability.
But I guess if the transgender-inclusive decision had previously been made, it is a social policy to change the status quo, just as much as it would be a social policy to assert such rights if they didn't previously exist.
Were there complaints from within the DoD about transgender employees harming morale/ underperforming?
If there were, then it would be worth looking into. But if Mattis didn't think there was a problem, which he seems not to have, I am inclined to trust his judgement.