"Ignoring a dictate by one country that has no authority over any other country?
Hauwei can legally do what ever kind of business it wants with whomever it wants, as long as they follow Chinese law."
That logic only applies in China, though. Surely you can see that your two sentences are not compatible. If Huawei follow Chinese law, then they have no problem in China. If Canadian and US laws decide that she is guilty of breaking US sanctions, then she is guilty, for precisely the reason you say she isn't guilty: because China's laws don't override Canada's. And look where she is.
Quite a few countries have the notion of universal jurisdiction for certain crimes.