ByteDance has a different version of TikTok (called Douyin) for the Chinese market, which complies with their censorship restrictions. My guess is they pulled TikTok out of HK to replace it with Douyin.
Douyin is likely better designed for censorship, data collection and so on, particularly in the context of Chinese language - I'd say the parent comment is right, the goal here is to replace TikTok with Douyin.
Better: it's a way to pull it away from a money-losing market without spooking investors: "Oh it's not that we failed in a Chinese city, it's that new law you know"...
It's absolutely ridiculous a Chinese company would be the first to actually close down the service to protect users, don't you think ?