In every historical case since the establishment of the UN, when warships freely sail within the territorial waters of a country without prior approval, it was seen as a challenge to the authority and credibility of the receiving country to defend their territory. i.e. to defend their monopoly on violence which is the basis for every country.
With territorial waters being commonly recognized as the littoral areas within 12 nautical miles of the shoreline.
In the special case of civil wars, the effect is magnified because of the uncertain claims to legitimacy of any of the claimants.
Does the government of the receiving country of unauthorized intrusions lose credibility if they let the intrusion go unchallenged?
In other words, lose some of the strength of their claim to the monopoly of violence
Recent events indicate that warships of the People's Liberation Army Navy (PLAN) of the People's Republic of China (PRC) have likely entered the territorial waters of the Republic of China (ROC), commonly known as Taiwan, unimpeded. (Or at least there are no reports indicating any attempts at preventing their entry)
Since presumably there was no invitation from Taipei, this suggests the PRC can freely send PLAN warships and have them navigate around without regard to the claims of Taiwan. Both sides are also, technically, still involved in an unsettled civil war.
This then suggests the authorities in Taipei are unable, or unwilling, to control their territorial waters. (Though they appear to have never claimed de jure independence, or even de facto independence directly, only indirectly)
For an island country there's the extra factor that there are no other clear-cut internationally recognized boundaries after the territorial waters are violated. (With airspace being much more difficult to police and observe.)
Even landing troops on actual land would be a more ambiguous situation, due to the existence of marshes, wetlands, beaches, high tide/low tide, temporary islets, sandbars, etc..., which may be exploited to place troops in a more ambiguous situation that may have some leeway.
The combination of the above factors seem to indicate island countries of disputed sovereignty are especially sensitive to such losses of credibility.
(There may also be several intermediate scenarios that Taiwan could transition to, such as suzerainty, vassalage, tributary, etc...)
Edited based on feedback.