Is this really sidestepping sanctions? My understanding of the sanctions is that they're less about us not wanting China to use them, and more about us not wanting China to get their hands on the physical cards so they can reverse engineer them/fully own the computation done with them. Overseas rentals seems like the intended direction for them to go, because they can still use the computation power, but don't have the physical hardware (plus they could lose all access to the datacenters in case of war).
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No, they didn't want tik tok scooping all the data up for the Chinese government. Facebook and Instagram and WhatsApp are meant to do that for the American government.