It can both be true that the West & Japan were beneficiaries of the "low hanging fruits" effect and that Chinese developers do not emphasize gameplay novelty and depth.
See above. It can both be true that there are less low hanging fruits, and Chinese developers are more prone to following successful formulas than striking out on their own.
Which, in my view, is the result of a cutthroat market environment, exacerbated by government regulations, that cause investors & developers both to be risk-averse. The industry will mature over time and realize, much as Chinese companies are starting to in other industries, that risk taking and R&D are actually necessary to be successful in the long-term; but it first has to be recognized.
I think your statement of "both being true" can only occur if you can demonstrate Chinese developers of today are more prone to "following successful formulas" than developers of today from other nations, while also demonstrating that Chinese developers have reached a state of market and industry maturity in terms of both funding and marketspace.
All of which is to say, I think if one wants to compare "innovation" it has to be done in a way where:
1. It is cross sectional and occurs for entities during the same period of time
2. It compares apples and apples, where the degree of "innovation" is not affected by confounding factors (for game development purposes it can mean industry funding, market availability, equivalence of gaming platforms/hardware etc)
Considering no. 2 is not yet reached, IMO instead of making a statement about the specific "innovation" of the Chinese game development industry I think it would be more reasonable to say that overall they have yet to reach the maturity of that of Japan or the major players in western nations. If anything that would be a more all encompassing recognition that the overall industry still has major sectors to advance on, while also recognizing that "innovation" requires funding, market availability, and mastery of antecedent systems and mechanics to occur first.
Extraction shooters have a novel gameplay loop around base -> killing -> looting -> extracting -> back to base. The primary gameplay incentive is greed (treasure, loot, wealth), not blood lust (as in traditional FPS). It also differentiates itself from traditional loot-based games by being designed around PVP, rather than PVE (like Diablo). That is its novelty.
"FPS" is way too broad of a definition to be considered derivative, and I'm not looking for Chinese developers to make fundamental innovations like "3D first person view" because that is indeed low hanging fruit. But I want to see more than taking the gameplay loop of an existing classic, putting it on mobile with Asian or anime aesthetics, and calling it done, as so many top Chinese games essentially boil down to.
I somewhat disagree with this -- that is like calling hero shooters, team on team shooters, extraction shooters, MOBA shooters, horde shooters, battle royale shooters, as all being unique gameplay loops. I would very much call these iterative rather than "innovative".
If those can be considered as having novel gameplay loops, then I would call something like Wukong to be just as uniquely differentiated from Dark Souls which is in turn differentiated from Sekiro and in turn Elden Ring.