Their point is if you’re served within China (aka hosted off a chinese IP, or accessing anything from a Chinese IP) it doesn’t matter if the other company interacts or complies with China’s rules - the other half of the transaction will be blocked.

So using DNS hosted outside won’t matter, because the destination Chinese IP will get blocked. Or if using outside hosting, it won’t matter, because anyone in China trying to access it will get blocked. Or anyone trying to publish anything to it the CCP doesn’t like. Presumably also with some follow up in-person ‘check-ins’.

The GFW is a pretty massive and actually impressively effective piece of technology, even if we don’t agree with it’s purpose.