...for newly converted HK residents. but HK govt never really check, so people can get a foreign passport without tell HK/China. the only risk is, he is then treated as a Chinese, and automatically gives up on the right to seek embassy help from his other host country.

-- this is by design of the PRC govt.

again, PRC will not and cannot interfere with his HK residency. he is totally wrong (or what you understood was) about this.