Getting back to your proposed scenario, successful Taiwan nuke testing in 1978/1979.
PRC has a massive advantage over Taiwan per se
This is true, in terms of crude TNT equivalent throw-weight, at least if nuclear munitions, mounted on SRBMS (SCUDs, No Dongs), MRBMs, IRBMs are included. Chemical munitions stockpile tactically deliverable from PRC to Taiwan at that time is less certain. Deliverable conventional firepower from PRC to Taiwan, by conventional warhead missile, bomber aircraft with conventional payloads, and naval ships, in 1978/1979 may be *considerably* less than would meet the eye or that would be grossly suspected of two land-adjacent neighbors of such different geographic and population sizes.
So, although China would *want* to present the following type of threat:
Wouldn't be surprised if this played out like Cuban Missile Crisis, Pt. 2 to be honest.
China in 1978/1979 I think lacks the naval and coast guard capabilities to mount a Kennedy-esque "quarantine" operation/de facto naval blockade against Taiwan. The Taiwan ROC could fairly contest the near-shores waters and maritime approaches to Taiwan and its ports, and, within the range of Taiwan's land-based air cover, it's qualitatively and tactically superior Air Force and pilots could help tip the naval blockade/counter-blockade balance further to Taiwan's advantage.
Now China's naval platforms, by dint of some quantity, including some minelayers, destroyers, and loud diesel subs could make some third party international shippers and insurers "skittish" and cause them to not operate in or insure trade/travel to Taiwan just by making danger of mines or cross-fire elevated. China also wasn't as far from its 'crazy-man' reputation yet. But the Taiwanese could probably pull off protected trading convoys for vital imports with indigenous shipping and naval escort. And the Taiwanese were tougher and more martial then than now. They were under Martial Law also.
The Chinese could also volley some SCUDs in the general direction of Taiwan's shipping lanes, ports and airports, but the accuracy would be piss-poor. China lacked ISR assets and had little or no space-based intel to help with accurate targeting. The max amount of damage and fright they could impose would be on the order of what the Houthis are getting done in the Red Sea now.
The lack of space-based intel and ISR assets means specific preemptive targeting, with any precision, of wherever Taiwan's bombs or limited delivery systems are unlikely to be on target. Unlikely to catch everything on the island. Less so than US targeting for Cuba in 1962, which could have well missed armed tacnukes or some armed MRBMs or IRBMs.
So Chinese tactics, campaigns, operations in a Taiwan Bomb Crisis could not quite have matched those of the USA in the 1962 CMC.
But, for similar strategic ends, disarming the island, China could substitute mass nuclear atomic throw-weight (and the threat of using it) for precision. The threat is disarm, and open for inspection on our terms, by ultimatum deadline, or we use nuclear fire power against all suspected areas housing weapons and beyond. Which is essentially a hostage terror tactic, promising to use at least two dozen of China's high-yield warheads, mounted on SRBM, MRBM, IRBM range rockets mainly over Taiwan's populated industrial areas to ensure pretty thorough coverage of any arsenal/delivery system, general military capability and state capacity. 'Destroy the province to save reunification'.
This requires a revision or explanation of exceptional circumstances making it a non-violation of no-first use policy, but Beijing could do it.
Then it is a matter of the Taiwanese believing it or not and third parties, none more important than the USA believing it and deciding if they want to support Beijing's ultimatum via alternate pressures on Taiwan.
If things proceed a bit further along the game of chicken, and China starts to arm and fuel up their nuclear missiles, other powers, the USA, and do not forget the very non-trivial USSR, both need to decide how they feel about China unholstering and brandishing its nuclear deterring with systems, that in the Russian case, can reach Russian territory. Then Soviets need to consider whether they should follow some doctrinal lines of thought suggesting they should strike first.
There could be an off-chance that even if the US is furious with Taiwan and seeking its disarmament, in this period at the height of the militarized Sino-Soviet dispute, the USSR ends up shielding Taiwan, saying it could not abide (and thus retaliate against) any Beijing nuclear attack on Taiwan, and would stop any imminent attack by "all available means.
Fun times!
Not all the prizes behind the multiple doors here are Armageddon or disaster for Taiwan, just some. Quite the contrary.