They would lose all of TSMC if they do any military actions. It's not the fact that the CCP thinks that they can make Taiwan and China a country, it's the the fact that most of China does in fact consider them as one country. Taiwan is ready to defend themselves, but are very happy keeping their relationship with China the way it is.
As an American, I found the deference to authority very strange.
But I agree that pretty much everybody will happily take the status quo over armed invasion.
Now that US has already opened the gate to labelling nation head as drug seller, this just eases things for China.
China isn’t going to invade China until after we get our semiconductors up and running in Arizona for real
(because US won’t have to think about that situation ever again)
removing dependence imperils that island, CCP already has an EUV machine so the inevitable sanctions and export controls on ASML’s in Europe won’t matter either