You're not wrong. It was very clearly illegal for TikTok to maintain operations in the US since the law started applying, and yet the US government ordered everyone to disregard the law and they just went along with it.
This is another sign of the US' decline. The refusal to follow inconvenient laws.
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Technically, the law did allow the president to approve a one-time extension if there was a deal under negotiation. But every subsequent extension (I think we’re on number 3 or 4 now) had no legal basis in the text of the legislation and both Apple and Google are clearly in violation of the law for not banning it from their app stores after the 1st extension