Reminds me of that episode with activision/blizzard: https://en.wikipedia.org/wiki/Blitzchung_controversy
In this case its the fear of losing business with China that is pushing the platform to apply standards to people who are not Chinese citizen.
They really do. The idea was that by doing business with them they would shift away from authoritarianism. If you look at the last years it is clear that exactly the reverse has happened. Companies are mainly profit driven and not by morals. They will happily compromise on their morals in the name of profit. In contrast the PRC will happily compromise on profits to keep control.
They start with the scenario you mention, then they push the weakened foreign entity out of China entirely. They did that to numerous, huge US brands/companies, including McDonalds and AWS. They make it inhospitable to continue to exist at all in China, then a ditch sale becomes the only viable option for the US company.
https://www.businessinsider.com/mcdonalds-continues-china-ex...
I think Valve still has a version of steam: https://www.engadget.com/steam-china-launch-133119511.html?g...
Activision/blizzard used to have a partnership with netease to release overwatch in China.
It is technically and realistically possible as companies do it all the time.