>What the heck is "diffusing", anyway?
You've just described one of of the use cases for AI, to instantly answer esoteric questions (instead of waiting for somebody to give an answer). ChatGPT gave a detailed answer even at first pass; I'd imagine Bard/CoPilot would give similar.
>I know that change was made to appease China.
You're viewing from a myopic, biased lens. Yours is a "us vs them" view, ie one is either with Taiwan or against it. There's a wider, neutral view, which is that all businesses abhor conflict and controversy that can impact their operations. They stay out of politics and culture war as best as they can.
AMD's was a sound business move, as the marking doesn't change Taiwan's situation one way or the other.