Once he got home, Timothy went up to his room, locked the door and took a look at the Medallion. He noticed something weird- there was a large crack along the centre of it, though it didn't run deep enough to risk breaking it. (Yet.)
"Aw, that kinda sucks," Timothy muttered. He threw it onto his clothes after undressing for bed, and tried to go to sleep. But as he turned the lights off, he noticed a bright blue glow from the Medallion running along the crack. He turned the lights back on again, and picked it up to get a better look.
Timothy shuddered as the Medallion affected him. The crack in the Medallion changed its power- when it touched someone's clothes, it made its transformative powers imperfect, and it changed the gender of the person whose clothing it had touched to be the opposite gender.
So when it touched Timothy, it set about turning him into a version of himself who was born a girl. His flat chest blossomed into soft C-cup boobs; his shoulders narrowed and his muscles slimmed, while his hips widened and his butt grew soft and pert; his balls were sucked up inside her new pussy; and his penis receded into a tiny clit.
Tanya looked down at her new body, and gasped as memories flooded into her head of having been a girl. She quickly realized everyone would remember her as Tanya, too; Timothy only existed in her head now.
Dropping the Medallion, she wondered what to do with it, her brain conflicted on whether he wanted to be a boy or she wanted to be a girl. Either way, she was tired and figured she should have a sleep...