I seriously doubt the Chinese police will care. Maybe if it was in a city where Apple had a factory and they had cultivated relationships with local officials, but out in the boonies they have no power.
Kunming is a huge tourist city that a lot of Americans go to when they visit China. This makes it easier for Apple to put pressure on them.
Maybe slightly, but no more than it would be for some chinese company to put pressure on the local police in San Francisco, and likely quite a bit less.
Even if Apple does do this, there are going to be tons of copycats throughout China. I'll bet we'll see some interesting variations like an apple with bite on the left side or a black apple on a silver background.
Depends how much Chinese government care about keeping Apple happy and how strong are connections of store owners with a (local) gov.