Yes, this seems correct. This behaviour is "compliant" in the sense of "complying with the law", so calling it a "challenge... in enforcing tax compliance" seems straightforwardly wrong.

The tax laws allow this. Preventing it requires changing the law. If a government complains about this problem but doesn't try to change the law, then it's reasonable to ask if the government is truly serious about doing anything.

However, it's also true that this a difficult problem for governments to solve. Consider a company that has a head office in the US and factories in Indonesia, selling to customers in Europe and the US. Where should the corporate profits be taxed? Without the customers, there is no profit. Without the factories, there is no profit. Without the head office directing the whole thing, there is no profit. Which governments are entitled to a share of that? If the Indonesian subsidiary is "selling" the goods to the European and US branches and turning a profit, and the head office is "selling" its management services to both and turning a profit, and the retail arms are making profits on sales to end customers, then there might be taxes to pay in each jurisdiciton.

Now move the head office to a tax haven, and have the subsidiary units pay hefty IP licensing fees to the parent company - it seems that there are no taxable profits anywhere!

This seems obviously bad, but the amount of work involved in crafting a set of rules which prevent this is hard. Either there is a global corporate tax rate such that this kind of profit-shifting no longer makes sense, or there is some system for distinguishing between illegitimate profit-shifting (to a tax haven) and legitimate profit-shifting (profits accumulating with the parent company in the US rather than in the subsidiaries). Of course, perhaps the latter isn't legitimate either! European governments worried about FANG companies would be no happier if FANG paid heavy corporate taxes in the US if they continued to pay very little corporate tax in Europe, for instance.

So, I think government complaints about this are of the "this is too difficult for us to figure out and get international consensus on", so they resort to a kind of moral shaming, rather like the local priest shaming the town's wealthiest individuals for refusing to pay for repairs to the church roof.

If this is only hiding the potato in layers and layers of companies in different countries, then they have still paid less taxes than what they owe, which clearly is against the law and will generally require them to pay the missing taxes. If it is done through negligent reporting to tax authorities, then more laws may have been broken.

You are absolutely correct. The Netherlands is a tax avoidance haven since many years. There seems to be a global consensus to keep it this way.