We're talking about it, aren't we? I've also seen this news on Reddit. Propaganda doesn't have to be a one size fits all. Targeting armchair experts and tech enthusiasts can still be useful. The point is that people are talking about how awesome your country is. Real or fake, I'd call this news story a success for China.
I'm not saying this technology is vaporware or not, I don't know. I'm just saying that the argument I'm responding to isn't great. I'd also like to mention that propaganda doesn't even imply that something is fake. Sputnik was real and also a great propaganda machine because it got people talking about it but so were other niche things like Russian Chess players and Russian mathematicians. We have international math competitions, you think those aren't used by propagandists? The average person cares nothing about a math competition.
I’d argue that almost no claim like this is even remembered, let alone becomes ‘embarrassing’.
On the other hand when people see them it definitely creates the propaganda or marketing value of China being ‘ahead’ in some way.
Recent flood, one of the state media headlined an outright lie that US govt states that China earned respect from around the globe through its flood rescue effort. Lied about the amount of rainfall and the capabilities of their dams. Some TV news station just never show flood footage. Any challenge to the effort is branded as foreign influence.
For story like this if turned out to be vapor, the blame would be easily placed in thousands of places but themselves.
During the Cold War the US and USSR made all sorts of tendentious claims about the superiority of their socioeconomic systems, their military prowess and mendacious things the other side was supposed to be doing and denied all sorts of things they actually did, but they didn't try to lie their way to the front of the Space Race.