Earlier quoted context omitted.
Your logic is bonkers. Not every principle or virtue is a hill that every inch is worth dying over. The US and EU (and pretty much every other country) also have many laws and regulations that are not privacy friendly. You claim this means they should close up shop (or only sell to seasteaders) if they are a true privacyman? It's a recycled version of the 'Al Gore has a big house' joke, guess he's doesn't really care…
If people simply admitted that Apple (like many others) will compromise on their privacy principles in exchange for commercial gain - we would never have been having a conversation on this topic. People want to hold Apple to a higher standard.. maybe thats also part of the problem.
How is that necessarily any better for humanity than simply obeying the local laws, going along to get along, while making it clear to your Chinese customers that their counterparts in more enlightened countries enjoy more privacy, more features, and an overall better experience?
I spoke with some people at a certain well-known company working on satellite Internet service a while back, and I asked them the same question. "What are you going to do when the Chinese try to shut you down for providing uncensored Internet service?" It was hard to argue with their response. They feel it is possible to make money and be a positive influence in various closed totalitarian societies including China. I think that's basically Apple's take on it as well.
Overt disobedience to the regime is rarely a good option for companies operating at global scale. It will get your employees declared criminals in large areas of the planet, and it can literally get your customers killed.