It is optional. If you read the Benzite info window when creating a character, it says they naturally need the respirator but many opt for genetic resequencing (legal, because Benzar is not a part of the Federation) to allow them to breathe from a nitrogen-oxygen atmosphere.
What you say there is not completely canon. Membership of the Federation had nothing to do with the Starfleet-requirements. The reason it is/was allowed is because it was a minor genetic alteration and it is seen as merely correcting an issue instead of enhancing it.