Correct, they do not have overseas data (at least in China).
However, GitLab's restriction also prevented them from employees moving to China as well. Many companies employ people in Asia/Europe timezones as a night-time on-call engineers and support.
Not to mention, the list (China, Russia) is a list of countries made up by GitLab, with no particular backing that's officially recognized by any particular government or organization, which makes the situation discriminatory.
Gitlab doesn’t really serve China and has no need for support engineers with in China.