Reading between the lines - MediaTek will probably send Intel some obscure parts for a small production run. This is "Intel 16" we're talking about, which is revised 22nm FinFET Low Power (that Intel thinks is comparable to 3rd-party 16nm). Aka Smart Home device chips, nothing near smartphone level.
So... they might have extra capacity, sure, but extra capacity isn't the problem right now. NVIDIA has overbooked and is desperately seeking a buyer for capacity when everyone is cutting back or has all the capacity they need. This won't affect the 5nm-ish capacity, but only TSMC 22nm capacity, which... how many buyers does that have? Is it overbooked?
So... they might have extra capacity, sure, but extra capacity isn't the problem right now. NVIDIA has overbooked and is desperately seeking a buyer for capacity when everyone is cutting back or has all the capacity they need. This won't affect the 5nm-ish capacity, but only TSMC 22nm capacity, which... how many buyers does that have? Is it overbooked?