In English we use the same word, "Chinese" to indicate both nation-or-origin and race/ethnicity. In a neutral/dictionary sense, to call this the "Chinese virus" is both appropriate and accurate as it indicates where the virus originated. But we don't live in a neutral world, and language isn't merely a dictionary definition. There is a lot of ambiguity and subtle connotations that come along with language as well. And because of that linguistic ambiguity, when you call this the "Chinese virus" you're not just saying where it came from, or that the Chinese government is at fault, you're also making an implicit association of the virus with the race. So all of the very strongly held negative emotions that are associated with the virus, become associated with individuals who are Chinese, which makes it easier and more likely for individual Chinese people, even those who are US citizens, to be blamed for the disease. Which can lead (and already has) to aggressive and even violent behavior.

This is essentially the same thing that was done to vilify German/European Jews in post-WW1 Germany. The economy was in the crapper, the Jewish people had strong connections to money/banks, therefore they were to blame. Individual Germans, while perhaps not overtly anti-semitic like Hitler, had these low-level negative associations and emotions about the economy that they associated with Jewish people, so when the government began rounding up the Jews, not many non-Jewish folks pushed back. Now it was obviously much more complicated than that, but this was an essential part of how Germany allowed the holocaust to happen.

Now, I'm not saying that the holocaust 2.0 is going to happen with Chinese folks if we call this the Chinese virus. And the example of the Jews and the holocaust is an extreme example. But in the extremity it highlights the possible danger of associating this virus and all its negative impacts and emotional baggage, even if only implicitly, with a group of people.