The US government claims otherwise. And even if data is not flowing to China directly, the threat is there from a legal point of view. Data is leaving US jurisdiction anyway. And China could force ByteDance to hand over data that is stored in Malaysia and Singapore.
The law and also the SCOTUS ruling don't even touch editorial discretion. TikTok is free to do whatever as long user data is safe from being accessed by an adversary like the Chinese. Its TikTok who made it about editorial discretion and free speech. They failed with that argument. And I agree with that.