This is true.
Those of us working on classified programs get briefed on this sort of stuff and this is exactly what they tell us.
These operatives are highly trained, research their targets extensively, and are very good at their jobs. Once they get leverage over their targets they're most of the way there. Sex, money, fame, are all very enticing to some people and once the leverage is established most people will do anything to keep it going and keep it private.
Huang's coming forward and publicly admitting the affair effectively zeroes out the leverage. It's probably the best thing he could do once the full gravity of the situation came out.
I don't know if high-level leadership at every company with export-restricted products gets the security briefings they should. I bet Mr. Huang and the rest of the leadership team at Nvidia is getting it now.
I heard stories of the CIA doing a class with new State Department employees, or ones at a certain level, that among other things involved the instructor "rating" everyone ("You're a 4, you're a 6, you're a 5..."), with the point being "If a woman comes up to you at a bar, and she's a 9 or a 10, she's either an escort or a foreign asset, and your safest assumption is the latter."