This seems to be primarily US-only problem... at least for now. As with previous US prohibitions such as Huawei, ZTE, etc. or pseudo-prohibitions such as Alipay, WeChat Pay, QQ Wallet, SHAREit, etc. it is only a matter of time before Five Eyes countries, followed by EU countries, are pressured to follow suite with their own prohibitions.
National security will continue to be used as an excuse by governments the world over to block access to services or ban companies that they don't like, don't trust, won't tow the line, or whatever (e.g. China blocks access to Google, YouTube, Twitter, Instagram, WhatsApp and Facebook for failing to adhere to the country's data security laws; India blocked TikTok and other apps for over privacy and data sovereignty concerns; Nigeria blocked Twitter for deleting/censoring tweets made by the country's president, etc.)
However, the most important thing is that for more than 85% of the worlds population, the sun will continue to rise in the east and set in the west; the most dominant smart phone manufacturers will still be Apple, Huawei, and Samsung; the most important social media platforms will still be Douyin, Facebook, Instagram, Kuaishou, Pinterest, Snapchat, TikTok, Twitter, Wechat, and YouTube; the companies that the world depends on for global telecommunications infrastructure will still be Cisco, Ericsson, Huawei, Nokia, and ZTE; and TikTok will continue to be the global phenomenon it is today - at least outside of the US.
According to the Reuters article the most valuable part of TikTok (other than the 1.6 billion users it has amassed) is its algorithm. Given that the same algorithm is used in the other popular ByteDance apps such as Douyin, Resso, Toutiao, and Xigua, it is understandable why ByteDance wouldn't want to sell this secret sauce to a future competitor. And given that TikTok's US daily active users barely make 5% of ByteDance's total worldwide DAU, it is understandable why ByteDance might conclude that their global growth outside of the US market will outpace the pain of shuttering the loss-making US experiment... at least they will get to keep the recipe of their content discovery, recommendation, engagement, and personalisation secret sauce.