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Notes -
I wouldn't rate that the most likely outcome, but it certainly seems a plausible one.
The question is, why is it plausible? Why would China taking Taiwan result in WWIII and a nuclear exchange? It seems to me that it shouldn't, given that Taiwan is not part of the US, and that any fight over it that I can see would be a conventional one over a limited context on the other side of the world. Why can't one side or the other simply lose, and then let it go, or even limit the escalation to a strictly conventional context? Why would the whole world need to pile in, and why would it need to go nuclear?
If China simply takes Taiwan, there's no need for WWIII or nukes. Likewise if we attempt to intervene, and it turns out their missiles are better and we lose the battle and a bunch of ships. In either of those scenarios, we could, and arguably should, accept the outcome and move on. Likewise if China fails to take Taiwan, or we successfully intervene and stop them. Whichever side loses, the correct move seems to be to accept the outcome, adjust to the reality, and move forward accordingly.
If either side can't do that, it seems to me that they're being some combination of crazy or evil. The plausible path to the scenario you describe would be for the losing side to double-down and escalate the conflict, and to keep right on doing it until the wheels come off. I don't think people should do that. To the extent that people are prone to doing stuff like that, I think they shouldn't be in charge of important things like defense, diplomacy, or government. Unfortunately, it sounds an awful lot like the sort of thing our current establishment would do... But that's just another reason to try and get rid of them as soon as possible.
It's certainly not the outcome I'm hoping for. The outcome I'm hoping for is a collapse in federal power and a retreat back to actual Federalism; the dream is that we all agree that this constitution thing isn't working so hot, and that we'd be better off simply letting individual states do as they will within their own borders, while maintaining some framework of common defense to handle the tanks and nukes. Bonus points if this involves securing the borders, pulling back from our commitments overseas, and attempting to mind our own business rather than attempting to police the entire globe.
To the extent that such an outcome is unpleasantly likely, I'm not sure what Reds are supposed to do about it, or why avoiding such an eventuality should be a consideration in their strategy for dealing with Blues. If the position is so precarious that our fight with blues threatens to destabilize everything, then perhaps Blues should not have pushed matters to such a point. If stability is their concern, they are free to secure such stability at the low, low cost of halting their present offensive, or perhaps even retreating from some of the ideological ground that they presently hold.
As things stand, I perceive Blues to be, effectively, a hostile foreign power. They are not my countrymen in any sense that matters. Their leaders have frequently mused about how it might be necessary to crush us militarily, just as we've mused the same about them. Such musings seem, to me, to be a reflection of the fundamentally incompatible values that lie at the heart of the Red/Blue divide, and give the Culture War its unique character. China, at least, is far away; it is not obvious why I should be more worried about their designs on Taiwan than about Blues designs on the power to control my life, and that of my children, and their children.
Thanks for the forthright response.
As for why I model that as most likely, well, a couple of things:
Taiwan is bad for the PRC and bad for the West if abandoned. It's bad for the PRC, or at least those in power there, because the CPC's power is based to a large extent on a perception that they will reclaim all that was lost in the Century of Humiliation, and because they've dug themselves a hole by emphasising Taiwan in their propaganda to the point that they are starting to lose legitimacy by not going for it (there was popular outrage over Nancy Pelosi's plane not being shot down, for instance, despite how hilariously-stupid that would have been). It's bad for the West because Taiwan is the weak link in the First Island Chain that keeps the PLAN from doing anything outside the SCS and ECS in event of war, and because Biden specifically said that the USA would intervene to defend Taiwan in the event of an attack. So there's a substantial possibility that neither side will back down. Paul Symon's interview, which I linked and transcribed a while back, notes that short-term incentives are for the PRC's intelligence services not to say "don't do this, everything will explode if you do this", which is a perennial problem with highly-nationalistic regimes and which doesn't help (my read of his talk about "a linear path" is that probably the Five Eyes have spotted preparations for a Taiwan attack, though as he said leaders' decisions matter i.e. Xi could just call that off at any point before shots are fired).
Such a war would almost certainly go nuclear if continued for more than a month or two. The fundamental problem is the fragility of the Chinese nuclear deterrent. I'd like to avoid a hot war with Russia, of course, but there's a significant chance that even a long such war would not go nuclear, because both sides' deterrents are secure and thus there is no need to put nuclear forces on hair-trigger in order to assure MAD; the Russians could afford to lose a lot of their missiles on the ground and still retain the ability to blow up most large US cities, and vice versa with the USA losing a lot of its missiles. But the Chinese deterrent is not very good; it does have a triad, but the sea leg of the triad is weak (due to the aforementioned First Island Chain), the air leg has no hope of getting to Europe or the USA, and the land leg would be within range of US SLBMs and nuclear bombers with their short warning times (also, not that many warheads compared to the USA or Russia). Thus, the Chinese deterrent would have to be on a hair-trigger in order to be any use at all, and the USA would be tempted to also be on a hair-trigger so that in case of launches beginning or an intercepted launch order it could destroy as much as possible on the ground; this in turn means that sooner or later there'd be a false alarm with one side thinking the other's launched and no time to confirm and oh whoops, nine-digit casualties. My guess is about 1-2% per day that this happens; I ran this by someone in the business and he said it's the right OoM. Do note that satellites and their excellent launch detection would be out very quickly in this scenario; Chinese war plans for decades have been to open up such a war with massive ASAT use, because of how immensely-powerful US military satellites are and because they don't care so much about Kessler syndrome.
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