It's better to look at the world from a perspective of possible/impossible rather than sane/insane as there exist people inside governments who are paid to do insane-yet-possible things.
I don't believe the theories around the Chinese government controlling children's minds through TikTok are likely to be true. It's probably just a dumb app. But there's nothing impossible about it.
The claim that you can *control* people's minds via TikTok is a pretty big claim. You can influence behaviour, but what the OP is suggesting is highly outlandish and almost certainly impossible (particularly the homophobic fear that TikTok can turn kids gay).
Remember that the advertising industry has been trying to control people's minds via all kinds of media for over a century, but is still only moderately successful at it.
Historically, the Soviet intelligence services used to think that they were very good at spreading Communist propaganda within Western countries. In many ways they were. And yet, not many Westerners became Communists. Just look at this guy explain how successfully the Soviets are subverting US public opinion only a few years before the fall of the Berlin Wall: https://www.youtube.com/watch?v=yErKTVdETpw
I don't believe the theories around the Chinese government controlling children's minds through TikTok are likely to be true. It's probably just a dumb app. But there's nothing impossible about it.