I think the implication of holding back launches to save algorithmic innovation is answered in your comment. If DS doesn’t launch its model, then someone will eventually use their innovation, like mHC, to innovate upon. There is no use in saving your breakthrough for a better launch; it is best to publish the result and work on the next frontier.
DS founder did claim to be pushing for China’s own AI stack sufficiency, and in doing so, they trained on Huawei hardware to understand all the quirks of training on an independent hardware stack. In all honesty, DS V4 is less about algorithmic innovation and more about the hardware front. They did just that and are probably in the best position to pull off training on their own hardware stack similar to Google (not sure about design, but they were originally quant, so they can't be that bad at designing hardware accelerators).
Also, this has massive implications for other Chinese AI teams if the political situation calls for a migration to Huawei infrastructure. In that case, Huawei will have this wealth of experience working with a frontier lab on how to provide, roll out, and optimize infrastructure for an AI launch. This can help if other teams decide to also move away or be less reliant on Nvidia's hardware in the future.