You underestimate it.
7% of Chinas total population are members of the CCP. 7%. So at DeepSeek there's a good few handfuls of them.
If you want to understand the impact of that, read up on reporting lines in the CCP.
Not every company needs sign-off from the government for an OSS release, but every OSS release is visible to the government.
Every open source release is visible to me, too. Is your point that the government could stop it if they wanted? That's true of every government, but it's not a problem until it actually happens.