The F-16 is hopelessly obsolete against the modern fighters in service in the PRC. If they really want to beef up Taiwan's air force, they would have to sell them the F-35. Which at this point has a similar price to the F-16. But the US won't do it so they won't annoy the PRC.
This F-16 purchase is just a waste of money.
(1)F-16V is still a modern upgrade with a modern array of western weapons, operating within friendly information environment unless on the offensive. For defensive posture, it is acceptable.
(2)F-16V is far more maintainable, though - especially if dispersed.
(3) Upgraded and new Falcons come in very significant numbers.
(4)Taiwan is full of fighters for its size - squeezing in more will start overfilling the order of battle&ground infrastructure, which won't really do good. Against PLA, an excessively tight order of battle won't be much 'value added', just added losses.
FYI, ROCAF's upfront strength is comparable to that Japan tended to deploy here for its WW2 offensive operations - w/o adjustment, which is sort of unprecedented in the modern world.
F-16V, it is the latest version, but total J-20 already outnumbers it. J-16 and newer J-11 should have more powerful radars due to larger size.
Plus some of the F-16V are upgraded from F-16A, so some airframes are quite old. ROCAF no longer intercepts aircraft from mainland due to cost and airframe hours.
F-16V is good, but it is facing near impossible odds.
There is no choice for them - they already go for ~maximum possible effort within given political and financial background.
Alternative is basically to give up air fight completely, which is even more suicidal.
But Taiwan is seriously stuffed with up-to-date fighters (rather overwhelming advantage over Japan, and will almost catch up to ROKAF within a few years). And while PLAAF/PLANAF are many times larger - they also have more opponents to worry about, and tasks at their hand are far more ambitious than just upfront confrontation.
Do we want fighter presence behind Taiwan, for example?
Even w/o those considerations - China
will have to at least keep significant deterrent forces around its borders.
There are opponents that need to be deterred everywhere, and even the sole "safeguarded" sector of the outer border is safeguarded by overstretched Russian VKS. Depending on how the situation goes, at best they may need backup, just in case.