> I don't quite understand how it works, but it seems if you use an eSIM in China you get around the great firewall without needing a VPN.

That's just the default for most mobile data services, eSIM or physical SIM. Your home network provides Internet connectivity. "Local breakout" (where you get an IP of the visited network) has never really taken off for various reasons, one being that people actually like being able to access everything they also can at home.

I also strongly suspect that this is why iPhones in China don't have any eSIM capability.