The flaw, in my view, is that you begin with something that sounds very general (GDPR is the first extraterritorial law!!) and wind up defending a very particular and narrow statement which is appears distant from your starting position (GDPR is the first extraterritorial law that targets SERVERS).
>GDPR is saying they could take action against one lone Chinese person operating a small business from home within China, someone who has never even left China, just because they collected data on someone in France.
Personally I wouldn't base my interpretation of a complex, and to a large extend untested, international law on some document from a international conglomerate (i.e. Deloitte). I would ask myself, if there are any ulterior motives (i.e. profit) that might be biasing their view.
NB: Biased information != False information.