I think the 2019 BoD notes (https://www.ittf.com/wp-content/uploads/2019/03/Propositions_and_Resolutions_to_2019_BoD.pdf) indicate that China may still receive national association separation protections. The rationale for prop 16 is: The intent of the current rule is that players from the same Association, who often have to travel a long way, do not have to play matches against compatriots. However, this should only apply to the top players, with all others guaranteed not to meet in the first round proper. This will also make the draw much more simplified and easier to follow
I would assume that China qualifies as "top". Maybe they are just too lazy to make it so that Jang Woojin and Lee Sangsu don't play each other in the round of 32 or something. Also, does prop 16 mean that only the top four players will be seeded? I am pretty sure that will make the draw more chaotic and less easy to follow.
Because the text in the BoD meeting notes and the ITTF Handbook isn't super clear, I don't think we will get a definitive answer regarding the applicability of the separation of association rule in the Olympics until ITTF makes a news article or issues a statement about the issue (which they probably won't, so we might have to wait until the Olympic draw occurs.) However, I am more inclined to hold the view that separation by association will not apply in this year's Olympics for several reasons.
First, while you cited Proposition 16, I think Proposition 21 is still more apt in answering the question regarding the applicability of the separation of association rule in the Olympics since provision 188.8.131.52 falls directly under the 4.5 Olympic Competitions Section of the ITTF Handbook (page 88). The 2021 Version of the ITTF Handbook has been recently released and it seems that no change was made and provision 184.108.40.206 still remains. If the rationale of 220.127.116.11 is to make the main criteria of Olympic Draws based on World Ranking, then getting rid of the separation by association rule is makes sense. If ITTF intended to keep the separation by association rule for the Olympics, then it would make no sense for it to even propose an amendment. It could have just done nothing during the BoD meeting since the default had always been separation by association during the Olympics. In my view, the fact that ITTF chose to make an amendment probably means that the way the Olympic draw will be done this year won't be the same as how Olympic draws in the past were done.
Second, CTTA was actually quite concerned about the passing of Proposition 21 or provision 18.104.22.168 on Olympic draws. In the Executive Committee meeting last Oct 20 to 21, 2019 in Chengdu, CTTA actually asked ITTF to clarify what Proposition 21 meant hinting that CTTA also interpreted the provision in a way that it seems to do away with Separation by Association in the Olympics. This makes sense as China would probably be the country most negatively impacted by this proposition. The text in the minutes reads as follows but you can access it yourself on page 17 of this document: "Request of clarification on a BoD proposition from CTTA- The Secretary General got a request for clarification from a Member Association on the Proposition 21, that passed in the Board of Directors in Budapest. The Secretary General suggested that the proposition should be considered as it passed (text presented in the BoD book sent to the members in advance and presented in the screen in Budapest, as there were no amendments made at the meeting). The EC agreed to the Secretary General recommendation."
Third, I was able to watch one of the Nightly Japanese Sports News programs that air on Japanese cable TV (Some Youtube channel recorded the TV program and posted it on Youtube). This was after Ito won the Doha Contender event and passed SYS to be WR no. 2. The Japanese TV Sports Analysts showed a graphic of the possible Olympic Draw and discussed the implications of Ito's win because of the possibility of her now being able to make the Olympic Finals without having to defeat a Chinese player. This implies that Japan has knowledge that separation by association will not apply in this year's Olympics. Given how concerned JTTA has been about Olympic seeding ever since 2019, it would be surprising if they didn't have knowledge on how the Olympic Draw will be conducted. Unfortunately, the Youtube video has already been deleted due to copyright infringement, so I can't post a link for reference.