Estradiol (E2) is basically a growth hormone. It causes cell division and renewal of biological processes. I think it can restart the hair growth cycle if it is stopped, but it can also stop it if it is ongoing. The problem is that in women, the spurts of high estradiol surges are balanced by the even higher levels of progesterone. So it isn't impossible that it causes initial improvements in hair growth, but in most cases that's not what happens. E2's physiological role is important in periodic cycles, but all the evidence is clear (at least to me), constant elevation of e2 leads to adverse pathologies.
I've seen the same accounts you have. Initial stimulation on E2, followed by hard collapse. I've seen several MtF cases of guys with perfect hair who end up losing their hair on E2 alone. And the real success stories always involved E2 + Spiro/CPA. The most amazing transitions even involve large doses of bioidentical progesterone (P4) taken rectally (to mimic the natural balance seen in women).
Bottomline, it always depends on the initial physiological state of the person transitioning. But considering we've seen accounts of full regrowth of bald scalps on spironolactone and cyproterone acetate alone (both which measurably suppress estradiol), I think we can say that it isn't E2 which is therapeutic.
I enjoy reading the transgender threads on reddit. There's so much information we can glean from these experiments.
Just seems to me that on a surface level they're using E2 to help jump start the growth and then the Spiro (or whatever other progestins they use) helps balance their newly developed "female" hormonal profile like menstrual cycles do.
Where-as men who want to remain thus (as well as be able to use their pecker) cannot load up on E2 and maintain because they will become estro-dominant or exacerbate current estro-issues. Estrogen dominance is an inflammatory condition.