The "ackshually it's Nijisanji blocking the collabs, because CHINKS!" theory makes much less sense.
First of all, the Hololive China/Taiwan drama started with and only involved Hololive Japan people, and chinks cared because that was the branch they were (emotionally) invested in (China being HoloJPs second biggest market at that time, various JP talents streamed on bili, etc.). The chinks cared much less, if at all, about the later HoloEN, it was always about controlling their original HoloJP oshis for them.
And guess what? HoloJP and NijiJP still do collabs occasionally (the frequency is indeed lower than before, but that has less to do with a blanket ban due to chink orders and more with both of them being busier and focussing on their own, plus Hololive having grown bigger since the earlier time when it more needed Niji collabs to leech). Also NijiID and HoloID can collab, but no one cares about those anyway.
If those dastardly chinks that are surely controlling the whole of Nijisanji wanted to "punish" Hololive for a drama caused by HoloJP (a japanese talent "disrespecting" China or whatever, and the whole JP branch pulling out of china, leaving chinks sad and angy) by not collabing with them, they would ban the collabs that actually matter, that is Niji-Holo JP collabs, because it's HoloJP they want to target and punish for what they did.
Instead, the theory asks us to believe that the chinks go "Hm yes, in response to HoloJP disrespecting us, we will.... continue to allow HoloJP-NijiJP collabs.... BUT instead block collabs between their unrelated new english side branches... haa, that'll surely show HoloJP and make them suffer!".
Nah, that makes less sense and has too many retarded intermediate leaps of logic, that the simpler "Cover is the one blocking EN collabs because they want to preserve their market lead and not give unnecessary attention to their direct competitor" theory has fewer holes.
Also, don't try to think I'm making a moral value judgement here, so you don't have to get "defensive" (as in "no, it can't be that Cover is blocking, because that would mean Cover is bad, but Cover can't be bad, so I need to construct a ridiculous scheme about how it's actually the other party that's bad!" etc.). I'm not saying it's good or bad either way. From a pure business perspective it even makes "sense" for Cover to block NijiEN (again, because they have little to gain from it, potentially more to lose)