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> Not to mention if your threat model includes attacker has hacked the server and added javascript, why doesn't the attacker just take over the server directly?

If the attacker can only hack the server that hosts your SPA, but not your API server, they can inject javascript to it, but can't do a lot beyond that

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So assuming server side compromise not xss - in theory the servers can be isolated, in practise its rare for people to do a good job with this except at really big companies.

Regardless if they got your spa, they can replace the html, steal credentials, act as users, etc. Sure the attacker might want something more, but this is often more than enough to do anything the attacker might want if they are patient enough. Certainly its more than enough to do anything TOTP would protect against.

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