The status quo allows for what are effectively two separate nations to keep face and avoid disaster -- for both. It is a unique and somewhat absurd state of affairs for sure.
Long answer is... Long. Probably reading on the history of China and what happened after the Communists won the war and the KMT retreated to Taiwan would be a good starting point to understand what's going on with Taiwan today.
( Edit : https://news.ycombinator.com/item?id=20263049 )
Also, no country in the world can have official diplomatic relations with Taiwan if they have them with China. ( Most do unofficially. ) Taiwan is consistently blocked by China from international organizations starting with the UN, etc. Not everything is as it should be in a 'truly' independent nation, with the status quo. A declaration of independence would therefore also affect every other country and the international order of things.