No one cares that Adani invested in Adani using some Bermuda funds

They care - but when a country is headed towards a totalitarian state and oligarchy, you can't do much.

What you do is what Hindenburg did, short them and make money!

As an investor in Indian markets I was spooked when the Hindenburg story broke - did some research and figured total Indian markets exposure to Adani is about 1%.

If you are investing in broad index funds you are fine.