They've announced that they won't enforce the fines required by the law. But yes, selective enforcement of laws is legal — it's how prosecutorial discretion works.

the law doesn’t ban tiktok it just grants discretion to the president to ban tiktok

The companies still take risk not obeying the law. Most large publicly traded companies will not task the liability risk based on a wink and a nod.

Congress writes the law but the executive enforces the law. They can choose not to enforce the ban.