China knows about all VPNs, but doesn't ban them outside of political turmoil. When people start protesting, then they cut off all VPNs. They just don't do it during "peace time" because they don't want VPN users to find out which kinda of VPNs they can't block. They also apply different rules to foreigners and locals, because they want to give a better impression of their country.

They don't need perfect enforcement, or even good enforcement. The purpose is to make VPN use criminal. Then you have a large group of people getting away with criminal activity which you can go after on an individual case-by-case basis, depending on your level of compliance or troublemaking in other areas.

China doesn’t actually want to ban VPNs. They want a list of all possible dissidents so they can actively monitor them. “Banning” VPNs just lets them narrow down the list of people who might engage in wrong think.

How many users are going to have the technical acumen & desire to keep playing the game?

At some point the number of people who are going to be able to succeed is so small they might know who you are just by virtue of you continuing to compete.

To an extent, but the US often compels foreign companies to either not deal with US customers or put up with US’s bullshit, so they could potentially get compliance from major overseas providers. More onerous domestic policy could also prevent it, like requiring that domestic network providers block unauthorized encrypted connections to foreign entities. And anyways, making something illegal doesn’t actually require making it physically impossible to do.

Secure encryption has been classified as controlled munitions in the past. Making SSH illegal is well within the range of possible futures.

It'd be a stupid future, but it's a stupid present so I'm not going to rule it out on those grounds.

It doesn’t really make any sense to ban vpns, but that was the premise and not altogether implausible despite being nonsensical.