That's not due to Apple’s business model or their own choice. They were forced to hand over iCloud by Chinese regulators.
I doubt you would be arguing that, if Apple bricked basically every iPhone in China, it would be evidence that their "incentives are aligned with their customers".
Being a separate device, as you said, means the phones would still work independent of Apple.
The Chinese government would block updates and sales, hencecustomers would blame them, not Apple, because Apple was incentivized with customers instead of the government moving forward.
It is not "bricking phones" as you said. As much as you don't like this fact, Apple had a choice and decided to put the Chinese government before it's users.
An iPhone that cannot connect to Apple’s servers is essentially bricked. Not only do a significant number of critical features on the phone require reaching out to Apple to function, but IIRC, after a certain period of time without being able to contact Apple, the phone will require you to log in with your Apple ID. I believe this is to prevent activation lock bypasses by blocking network resources.
I remember reading about an issue a while back, where a person got locked out of their phone at sea, because they didn’t have network access for an extended period of time.
You're splitting hairs here about Apple choosing to share their user data with the Chinese government over their user's privacy.