I think maybe this story is oversimplifying. I haven’t followed recent politics in Taiwan, but the Kuomintang is the party of Chiang Kai-Shek.
What I think they probably intend is to stop the verbal provocations against China, which never actually got anywhere, and try to establish stronger trade relations, to improve the economy.
I seriously doubt whether they want to cede the island to the mainland Communists.
I doubt they have the intent of ceding the island, but this is very likely the end of the China-Taiwan game for the United States. China has seen that its economic rewards-and-punishments game has already born fruit, and will simply enwrap the island. Taiwan will increasingly simply go China’s way if this holds, and I would expect that not long into the next decade (several years from now) Taiwan will be seen as putting on a public face of pride but towing the Chinese line on economic matters.