Literally all they had to do was sell the CCPs stake in the company to anybody not in the CCP and they were unwilling to do that, opting to burn the whole company down instead.
If they did that one thing all this would be avoided.
If the Chinese government benefits from TikTok's ability to influence Western minds, then right, they may prefer the company dies than lose that capability.
If they aren't running influence campaigns on TikTok that targets Americans, then they should be fine with a sale to a fully-non-Chinese owner. Sure, they lose future revenue, but I'm sure they could sell it for a pretty nice sum.
(Honestly, if the Chinese government is not using TikTok to spread propaganda to the West, they are wildly incompetent to pass up such a fantastic opportunity.)
tl;dr - Sure the CCP is probably doing ‘the thing’, but it is not going to lead to the downfall of the mythical ‘West’
Maybe taking over the recommendations algorithm (or banning any kind of algorithmic feed other than chronogical) would have sparked less concerns. But changing the algorithm to make it less addictive would probably effectively kill the platform through loss of user interest.