That is not the rule. A Team cannot replace an athlete in the TE who has already competed in a TE segment, unless it was one of the declared exchanges (and those athletes have to be listed), which is only possible if there is more than one individual competitor in that discipline.
The IOC's Late Replacement Policy supercedes the ISU's replacement policy:
https://www.fil-luge.org/cdn/uploads/2021-08-24-ioc-joint-policy-late-athlete-replacement-final.pdf
This requires a medical certificate attached to the application, which has to be filed and approved (by the IOC) before the Team Leaders meeting for the sport/discipline.
Presumably Zhou could have been replaced in the individual event because of a medical condition; however, logistically, this was impossible because of the cv travel/entry/testing protocols. It might have been a different story in one of the later disciplines, for cv or injury/other illness reasons.