There seems to be a continual misunderstanding among different groups about what the term "transitional fossil" means and how they are used to test the theory of evolution.
One of the common misunderstandings is that a transitional fossil is assumed to be a direct ancestor or descendant of other fossils or living species. This simply isn't true. This isn't how transitional fossils are treated in "real" science (i.e. the actual practice of science by biologists). In fact, just the opposite. All fossils are assumed to be sister taxa to the direct lineage. For example, this is a cladogram for lobe finned fish and tetrapods with a diagram of their front fin/limb:
The most recent transitional tetrapod found is Tiktaalik, and it is shown as a side branch to the direct lineage of Tulerpeton. This is true of all fossils.
So what are we really saying about transitional fossils? This is what Darwin had to say:
"In looking for the gradations by which an organ in any species has been perfected, we ought to look exclusively to its lineal ancestors; but this is scarcely ever possible, and we are forced in each case to look to species of the same group, that is to the collateral descendants from the same original parent-form, in order to see what gradations are possible, and for the chance of some gradations having been transmitted from the earlier stages of descent, in an unaltered or little altered condition."--Charles Darwin, "Origin of Species"
http://www.talkorigins.org/faqs/origin/chapter6.html
That is what Darwin did 150 years ago, and that is still what biologists do today. Scientists are looking at the features that have been preserved in the side branches of a lineage.
So if the fossils can't be proven to be direct ancestors of any living or extinct species, then how can they be considered evidence? The answer is simple. The nested hierarchy. This is the pattern of both similarities and differences that the theory of evolution predicts we should see in the fossil record. For example, it predicts that mammals evolved from reptiles. It also predicts that no mammal ancestor was a bird, nor were mammals the ancestors of any bird species. Therefore, there should have been species in the past who had a mixture of reptile and mammal features, but no species that have a mixture of bird and mammal features.
It is this prediction, and many more like it, that we are testing with fossils. When we find a fossil with a mixture of mammal and non-mammal features, it is a test of this prediction. We don't need a complete fossil record to test this prediction.
And this leads us to the next misunderstanding. Some people insist that we have to have a complete fossil record in order to test the theory of evolution. First of all, we don't need a single fossil to test the theory since we also have DNA:
"Arguments against macroevolution, based on so-called gaps in the fossil records, are also profoundly weakened by the much more detailed and digital information revealed from the study of genomes. Outside of a time machine, Darwin could hardly have imagined a more powerful data set than comparative genomics to confirm his theory."--Dr. Francis Collins, "Faith and the Human Genome"
https://tulsa.younglife.org/Documents/Francis Collins Article on Faith_Science.pdf
Beyond that, however, is the scientific method. With this method, we use the evidence we do have to test a theory, not the evidence we don't have. The fossils we do have match the predictions of the theory. That satisfies the requirements for the scientific method.
From a practical standpoint, there is no reason that we should expect to have a fossil specimen of every species that has ever existed in our museums. We have only looked at a tiny, tiny portion of geologic record, and we are still finding new species on a monthly basis. So why should we expect to have a complete fossil record if evolution is true? Well, we shouldn't.
One of the common misunderstandings is that a transitional fossil is assumed to be a direct ancestor or descendant of other fossils or living species. This simply isn't true. This isn't how transitional fossils are treated in "real" science (i.e. the actual practice of science by biologists). In fact, just the opposite. All fossils are assumed to be sister taxa to the direct lineage. For example, this is a cladogram for lobe finned fish and tetrapods with a diagram of their front fin/limb:

The most recent transitional tetrapod found is Tiktaalik, and it is shown as a side branch to the direct lineage of Tulerpeton. This is true of all fossils.
So what are we really saying about transitional fossils? This is what Darwin had to say:
"In looking for the gradations by which an organ in any species has been perfected, we ought to look exclusively to its lineal ancestors; but this is scarcely ever possible, and we are forced in each case to look to species of the same group, that is to the collateral descendants from the same original parent-form, in order to see what gradations are possible, and for the chance of some gradations having been transmitted from the earlier stages of descent, in an unaltered or little altered condition."--Charles Darwin, "Origin of Species"
http://www.talkorigins.org/faqs/origin/chapter6.html
That is what Darwin did 150 years ago, and that is still what biologists do today. Scientists are looking at the features that have been preserved in the side branches of a lineage.
So if the fossils can't be proven to be direct ancestors of any living or extinct species, then how can they be considered evidence? The answer is simple. The nested hierarchy. This is the pattern of both similarities and differences that the theory of evolution predicts we should see in the fossil record. For example, it predicts that mammals evolved from reptiles. It also predicts that no mammal ancestor was a bird, nor were mammals the ancestors of any bird species. Therefore, there should have been species in the past who had a mixture of reptile and mammal features, but no species that have a mixture of bird and mammal features.
It is this prediction, and many more like it, that we are testing with fossils. When we find a fossil with a mixture of mammal and non-mammal features, it is a test of this prediction. We don't need a complete fossil record to test this prediction.
And this leads us to the next misunderstanding. Some people insist that we have to have a complete fossil record in order to test the theory of evolution. First of all, we don't need a single fossil to test the theory since we also have DNA:
"Arguments against macroevolution, based on so-called gaps in the fossil records, are also profoundly weakened by the much more detailed and digital information revealed from the study of genomes. Outside of a time machine, Darwin could hardly have imagined a more powerful data set than comparative genomics to confirm his theory."--Dr. Francis Collins, "Faith and the Human Genome"
https://tulsa.younglife.org/Documents/Francis Collins Article on Faith_Science.pdf
Beyond that, however, is the scientific method. With this method, we use the evidence we do have to test a theory, not the evidence we don't have. The fossils we do have match the predictions of the theory. That satisfies the requirements for the scientific method.
From a practical standpoint, there is no reason that we should expect to have a fossil specimen of every species that has ever existed in our museums. We have only looked at a tiny, tiny portion of geologic record, and we are still finding new species on a monthly basis. So why should we expect to have a complete fossil record if evolution is true? Well, we shouldn't.