Presumably at least in part because China's just as dependent on TSMC as everyone else (at least for the time being). So it's a form of Mutally Assured Destruction, kind of like nuclear weapons. If they actually have to be used, then everyone's in for a bad time, but seeing as nobody wants that, it acts as a disincentive.

If Taiwan is being invaded, the annexation is happening. There's no longer any reason to disincentivize annexation. Destroying the fabs is about denying China a major prize.

That question comes up every time this fact is posted, and it could be for the very simple reason to disincentivize annexation to a later date.