Although true the history of that time touches directly on multiple issues literally going on today.
1. How do you represent Isreal-Palestine?
First of all, I am NOT a game developer, so please don't expect me to present a fully developed game (along with accompanying Developer Diaries for perusal) as an answer to your questions.
With that out of the way, I think there are some ways to present Palestine: it can be either a rebellious province(s) of Isreal (including the Gaza strip), a new category of polital entity in PDX games (something along the lines of puppet of HoI4 which is extremely limited in its actions BUT still allows for the outside world to interact with it) or an occupied terriotry akin to the ones depicted in HoI4 (complete with resistance and garrison mechanics). All of this, of course, under the condition that Israel occupies Palestine and/or doesn't get annihilated by the neighbouring countires early in the campaign.
2. How do you represent Tibet? The great leap forward? Tiananmen square?
Tibet: as an independent existing country at the start of the campaign, which can be annexed by China. Judging by HoI4 there is no problem.
The Great Leap: Forward: a string of RNG events activated upon undertaking the decision to initate it. It would require making hard choices, some of which would be mutually exclusive, and balancing factions. If a player succeeds, the PRC goes through it with flying colours. If the player makes some blunders along the way, we get the historical result. If the player fails, the PRC becomes perilously close to fracturing or severly weakened in the long run.
Tiananmen square: the same mechanic for protests/political opposition as for every other country (inclduing the USA) with a number of options for dealing with the protesters, each one having long-lasting consequences.
Please do remember, that you are making an assumption here, that the communists will win the Chinese Civil War early in the campaign each and every time. What if the opposite happens and Chiang Kai-shek forces Mao Zedong and his followers to flee?
3. So many genocides. How do you give rawanada justice? The khmer? are latin american death squads gonna be a mechanic? This stuff is literally the basis for so much political history of this era and the 'crisises' that drove them.
HoI4 got away without depicting the you-know-what-we-cannot-discuss-here while being one of the most popular of PDX games that I really fail to see the problem here (don't believe me? Check
Occupation laws and pay close attention to "Brutal oppression" next time you play HoI4).
4. How do you represent modern border conflicts? China, pakistan, india, etc.
The simplest of the bunch: significant "border friction" malus to mutual relations, attrition mechanics applicable to garrisons and, depending on the size of the countries, their respective military and whether they have access to atomic weapons, a source of concern (and opportunity) for the international community allowing for special dimplomatic actions and an in-game
Doomsday Clock modifier.
It's not that I think the timeframe isn't interesting. It's just that it's significantly more of a minefield than most other settings. HoI4 already skirts the hell out of this stuff.
As I've already mentioned when referring to HoI4
Occupation laws, it isn't impossible, it just requires finesse.
How does a company represent the last few years tastefully and without controversy? I don't know the answer to that.
Perhaps by not representing the last few years just yet and doing a game about the Cold War?

Plus, these guys weren't afraid do make a
DLC about Donald Trump so the sky is the limit.
I remember my father telling us as kids, that history can only really start getting told when everyone involved is dead.
The danger here is that the narrative can get taken over by opportunists, who will not wait for those deaths.