Ms Peggie was suspended on 3 January 2024 following the Christmas Eve incident, where Dr Upton said Ms Peggie had referenced Isla Bryson, a rapist who is also transgender.
The tribunal previously heard the encounter left Dr Upton in a distressed state.
Ms Myles was asked to help oversee Ms Peggie’s return to work.
She believed it was “in the best interests of both (Dr Upton and Ms Peggie) to keep them separated”.
The clinical service manager added that this was “damage limitation” given the previous encounter.
She proposed Ms Peggie could work at another hospital, such as the Queen Margaret hospital in Dunfermline, an idea rejected by the nurse.
Another proposal was to have Dr Upton and Ms Peggie work different shift patterns, but Ms Peggie told Ms Myles did not feel she could work day shifts due to having a routine based around her family and looking after her dog.
A compromise was agreed where Ms Peggie would work weekends and be supervised during a phased return to work.
Ms Myles said that as the case was “quite limited” regarding witnesses to the Christmas Eve incident, then what was said in the changing room was a case of “she said/she said.”
The tribunal moved straight to evidence, without any mention of a controversial statement published by the health board on Friday.