> I genuinely doubt that the level of theft ever rose to a large enough margin, if it did, Apple would have pulled out of China.

There was a point where the black market in China was making more on Apple products than Apple itself. They initially tried to have stricter warranty conditions in China as a fix, but state media decided this was an affront to the country: https://www.infoworld.com/article/2271627/apple-clarifies-wa...

Hence, the technical fix.

Why pull out when you can apply a technical fix and retain both access to the biggest consumer electronics market in the world and maintain the good graces of the country that manufactures almost all your products?