I tried to wargame this WLI idea from the POV of a Chinese lab owner who tries to get a relative advantage over rivals.
From that POV, I saw some inroads. Here are a few:
1. The language and loyalty asymetry: It's easier for China to find English-speaking inspectors that it can trust, and China has good expertise in controlling through fear - such as harming relatives. It's harder for the US to find Chinese-speaking inspectors that it can trust, and it US is less experienced in controlling through fear
2. The implicit assumption that a lab is a lab: As a lab owner, I might spread my R&D work to universities, non-frontier labs, or contractors. If the US has enough inspectors and they can inspect those entities, I can make each piece of work just below the threshold
3. The whole more than the sum: The moment restrictions are eased, I can try to put together just-below-threshold parts to create an over-threshold whole
It'd be interesting to wargame further to see how to counter inroads such as above and more.