What's stopping them from moving to TSMC 5nm? The product has insignificant volume so competition for wafers shouldn't be a concern
Yes I think if there was a "Intel 7nm vs TSMC" decision to be made, especially for a product slated for late 2021, that TSMC's 5nm would be the only choice because the density of the two and performance should be roughly comparable. TSMC's 7nm would be unworkable with a ~2x density difference.
The competition for 5nm wafers wouldn't be so fierce by that time, as it would be fully ramped up. The bulk of Apple's 5nm run would be behind them at that point, and customers like them who following TSMC's leading edge would be taping out N3 designs and maybe getting back A0 silicon around that time.