This is a much better solution, not worse, because empirically the only thing that stops countries being invaded is having nukes, so the more countries with nukes, the fewer invasions there'll be.
That approach was already tried against Hitler, allowing Germany to reunify with Austria (Austrians were even willing), and then taking Sudetenland.
If you reward aggression, you will only get more aggression.
That is not true, punishing aggression creates more criminals, fixing their problems creates less criminals, there is plenty of evidence of this. USA rewarded Germanys aggression with the Marshal plan, rewarding aggression is great!
Another example, Norway didn't want to be a part of Sweden any longer, Sweden rewarded this "aggression" by giving Norway independence. Everyone lived happily ever after, the end.
Happy endings are possible.
If you say that isn't "aggression", that is what people say about other separatist movements, separatists are always labeled aggressive and combative, somehow people always argue that separatists are never happy and always wants more, but evidence suggests that letting them separate actually can work and make both sides happy. So I am pretty sure that sometimes when two countries wants to unify you should let them, meaning "rewarding aggression" is sometimes the right play.
For example, if England instead of waging a war against Irish separatists let them separate I think both would be happier, but instead of doing like Sweden they punished the aggression and just caused misery for everyone.
Now about China you are possibly right, I just think you can't say that you shouldn't reward aggression in general, because often that is exactly what you should do.
For example, if Taiwan built nuclear weapons, then the whole invasion idea is cooked and won't ever be worth it and you can't say 'Oh, America is over there' because it's all Taiwan and then nobody needs to care about this anymore.
An independent Taiwan is a threat to their plans for military conquest, nothing more.
1. The U.S. fails to protect Taiwan. 2. All allies lose confidence in the U.S. nuclear umbrella, and they create their own nuke programs. 3. Japan and S. Korea produce nukes nearly overnight. Lots of other countries follow. We now have a much worse nuclear arms race.
China needs only one reason to make the argument for taking control of Taiwan. That's national security. Taiwan is extremely important as a strategic island for defense of the mainland. For example, go look at a map of Taiwan airspace vs Chinese airspace. Honestly, I find it almost ridiculous that such a great power is boxed in so much by a tiny neighbor.
Personally, I think Taiwan needs to take one for the team and commit to reunification with China. That would cool things down significantly. Maybe the Chinese could even throw in some deals on borders to give the Philippines and other neighbors a break.