Honestly, most of the targets that a M-60 HIFV would engage can be easily handled by autocannon. As for the few that can't, that's the purpose a TOW/Javelin launcher on the HIFV turret (and frankly, more effective against say a ZTZ-96 ot ZTZ-99 compared to a 105mm cannon).
It sounds potentially to be open to long delays and cost overruns, as I don't believe those are standard US modifications. I would simply look to give the M60s a life extension package. It would probably end up being more cost-effective and delivered quicker.
There's also nothing to stop Taiwanese soldiers carrying Javelins in their transports or mounting TOWs on Humvees (assuming they're not already doing the latter).
Even with Sinoscepticism increasing in DC, it doesn't make sense to make Taiwan the center for Sino-American confrontation
Who said that politics has to make sense?
But in this case, I'm not sure to what degree the US has a choice at least for the next few decades. If China takes Taiwan, patriotism in China will go into overdrive because it will be seen that the US backed down. No concessions will be made about how the US was pragmatic or acted "responsibly". It would be taken by many as a sign that China was the top power in Asia, if not the world. In those circumstances, why would the CCP believe the US would be guaranteed to go to war to protect another country like Japan?
Then there's the danger of ultra-nationalism from conquering Taiwan running out of control in China, such that the CCP wouldn't even have the choice of not making further territorial conquest, such as taking the Senkaku Islands and even some of populated Ryuku Islands to get revenge on Japan for the last war. Even if we given Xi credit for being a political superman able to control any situation and calm people's hearts with a few words and a wave of his hand, he isn't going to live forever.
Either way, if China doesn't halt its aggressive foreign policy after taking Taiwan, the US would just be deferring a war until China had even longer to improve its military capabilities.
Now the US helping negotiate a political settlement between China and Taiwan, that would be quite different. But up until now the CCP has refused to allow anyone to get involved in its Taiwan negotiations.