Morphe seems functionally identical to ReVanced. What is different?

So America’s current administration could decide they don’t like someone for petty reasons and cut that whole country off from using one of the two most adopted phone OS in the world?

Yes but only WRT Play Services. AOSP is not affected. That's why phones in China come with manufacturer specific replacements which is also why there are many different app stores there. Each manufacturer has their own.

Yes. And this is why other countries should develop local / fully open-source OSs. Your entire digital infrastructure depending on a madman's whims is a national security problem.

Unfortunately that’s how sovereignty works.

The US govt could sanction a country and prevent both if they wanted.

It would get challenged in court though def