I don’t believe customs is allowed to keep a foreign passport. The passport belongs to the country that issued it, doesn’t it? It certainly doesn’t remove their citizenship!

The most China can do if they find you have dual citizenship is remove your Chinese citizenship. But I doubt border agents can do that on the spot.

I know CBSA can’t remove someone’s PR or Canadjan citizenship. They can certainly reporting it through to those who can, but that’s maybe a separate discussion.