I agree that they are incompetent for not trademarking it in China, but I still find it odd that this would affect their ability to sell in Taiwan, Malaysia, etc.

For example, they ought to have the upper hand in the U.S. as long as the Chinese name more commonly refers to their game than the copycat's (since U.S. is not first-to-file), but it sounds like Apple is nevertheless prohibited from including their game under Chinese name in the U.S. (for Chinese-speaking U.S. players) due to PRC law.