ALL species are transitional.
If you are referring to species, as within a single population - according to scientific terminologies or kind, as mentioned in the Bible, I believe that changes do take place, hence the variety we see within that population, or kind.
However, aside from that, there is no evidence, for example, of this:
Persons only assume, by inference that, evolution took place at a macro level.
This is what you are referring to.
If so, how is it that these walking fish are supposed to be the transition between fish with gills,
and fins, and tetrapod with lungs and feet, yet these walking fish existed 370-380 million years ago, and exists today, and they are not "living fossils"?
But handfish show what certain transitions (from fins to legs) might have looked like.
I like that you say, "might have looked like." It certainly is highly likely that was not the case at all.
In fact the variety of fish we see today, and the variety of every other organism, is seen in the fossil record.
We have today, animals with gills, and lungs; feet and fins; wings and no flight; beaks and "teeth"; etc.
It appears to me, that evolution on a small scale was part of God's purpose, but as it says in the Bible, God created everything according to their kind. Hence we have a diversity, of plants, flowers, trees, and animals... and mankind - us.
Well it is a bit more nuanced than that.
You are right that there are some people who are philosophical materialists or physicalists. Such people have a worldview in which they have decided that only the observable material world is real, and that anything outside that is fiction or fantasy. A good number of scientists, though far from all of them, hold this worldview.
Science itself says nothing about philosophical worldviews. It is concerned only with finding explanations of nature in terms of nature, by observing patterns and relationships and building predictive models of aspects of the physical world. But, because its job is to explain nature in terms of nature, there is no place in science for the supernatural. The very many scientists who are also religious believers have no trouble with that.
So it is important to distinguish between people arguing to keep supernatural ideas out of science, which is something we should all agree is important, and people who reject supernatural ideas entirely, due to their personal philosophical conviction.
I believe I understand, you are speaking of Methodological naturalism,
Methodological naturalism is a strategy for studying the world, by which scientists choose not to consider supernatural causes - even as a remote possibility. There are two main reasons for pursuing this strategy. First, some scientists believe that there is no supernatural: they begin with the assumption that God does not exist (see atheism) and that there is no life after death (see also Atheism and life after death). Second, some scientists believe it is possible that supernatural causes (such as God and angels) may exist, but they assume that any supernatural action would be arbitrary or haphazard and therefore impossible to study systematically.
...in contrast to Philosophical naturalism.
In philosophy, naturalism is the "idea or belief that only natural (as opposed to supernatural or spiritual) laws and forces operate in the world." Adherents of naturalism (i.e., naturalists) assert that natural laws are the rules that govern the structure and behavior of the natural universe, that the changing universe at every stage is a product of these laws.
I understand the argument presented, and I do not believe that scientists need to go beyond Methodological naturalism, in order to be open-minded. As you say, some scientists accept the probabilities and possibilities of things that may not be currently known.
In other words, not believing in something or believing in something is not a gauge for determining who is reasonable from who isn't.
There are various fields of study, and we don't expect that one field of study will cover all aspects of life.
For example, some people seem to think that every single thing must be studied using one strict and rigid method, and if it can't be subjected to that method, then it should be dismissed.
I don't find that reasonable. What about you?