They weren't totally defeated, but retreated to a "rump state" (https://en.wikipedia.org/wiki/Rump_state) that still exists as an independent entity. Many countries, especially in the middle of the 20th century, would have preferred that government regain control of China from the Communists.
For an even more extreme example where that actually happened, look at the Baltic states. Their annexation by the Soviets was never recognized by many non-Communists states, and eventually their states re-established independence in a way that's generally considered continuous with their per-annexation states. They didn't even have the benefit of having rump states during the Cold War.
https://en.wikipedia.org/wiki/Estonian_government-in-exile
> However, the Estonian government in exile did serve to carry the continuity of the Estonian state forward. The last prime minister in the duties of the president, Heinrich Mark, ended the work of the government in exile when he handed over his credentials to the incoming President Lennart Meri on October 8, 1992. Meri issued a statement thanking the Estonian government in exile for being the keepers of the legal continuity of the Estonian state.
https://en.wikipedia.org/wiki/Estonian_Diplomatic_Service_(1...
https://en.wikipedia.org/wiki/Baltic_Legations_(1940%E2%80%9...
They were defeated, and yet still considered the "defacto legitimate government of China"? How does that work? I would think very few people consider the ROC the "legitimate" government of Mainland China.
> America acknowledged ROC as the legitimate government of China
Why is this relevant?