"Impossibly thin" is right in line with Patrick McGee's "Apple in China" who argues that the main reason for Apple's designs is to keep imitators at bay by introducing manufacturing challenges that only they can meet. Indeed impossible at the time of release. One generation after the other. He estimates this gains them about 6 months of headway. Tough world. (Yes, to be fair, there is more to this new phone than just…
What’s the evidence for which way causality works? Apple solving design problems they care about would inevitably involve solutions only viable at their scale. It’s hard to say whether that’s how they choose their design problems. Their process seems pretty similar to their approach with unibody MacBooks or the original MacBook Air, both of which were introduced long before imitators were their primary competition.
One qualifier would be "at scale and profitably."
But for more detail, yes, the situation has changed over time and probably the reasoning has changed over time.
McGee spends a lot of time on the difficulty for Apple R&D to keep up with Apple design bureau's demands. To the point that Apple execs arrive at decisions that for the sake of internal peace and meeting deadlines, Apple Industrial Design is not to make arbitrary demands (like they used to) and must consider manufacturing realities. Which still leaves Manufacturing struggling at every step to keep up. So - usually - manufacturing is very much pushed to the edge of what's possible by Design. Even though Apple teach China phone manufacturing (again "at scale and profitably"). Design are the ones pushing. Whether Design is really concerned with keeping ahead of competitors... is not explicitely told by Apple people. They do seem to love "impossible". In my recollection, it's more McGee's observations and conclusion.
Apple mainland China companies competition has also been a widely varying quantity. In part due to Chinese fashion trends and in part due to Apple political difficulties in China (which come and go). Underlying should be "at scale and profitably": Apple rightly shouldn't care if a few exotic phones come out. That wouldn't matter to their bottom line. They are described as caring when there is a flood of matching phones coming out - and even then with some latency.
Overall btw, "Apple in China" is fantastic. With massive amounts of local color and "story viewed from the Apple China people's side". Lots of bits that were missed if you mostly followed Apple from the side of what we see in the US.