It is legal.

I think its done that way to try and prevent a person from going through all the changes and help them get to a point where they aren't experiencing dysphoria. I also know that bottom surgery isn't viable for some because of costs. Many end up going to Canada or Thailand because of costs and other variables. Expertise in surgery is not found everywhere. For instance Sweden has a neutral pronoun and a more supportive of transitioning individuals. However, despite this their options for bottom surgery are not as successful. (Cost for surgery is also supported by state whereas the US insurance companies may see the surgery as cosmetic) It is probably more common to see people 'switch back' at earlier stages where hormones are introduced. It happens, but would not be as common after extensive surgery.

There are also many people who find their dysphoria stops before surgery or they feel comfortable with themselves and choose to inhibit that space between male/female.