I meant investing in asymmetric capabilities (conventional or even midget subs) is a better investment in LPDs. If China were to attack Taiwan, it wouldn't be content with just the islands in the South China Sea.
I understand where you're coming from. However, I don't think we should assume that China will definitely go all in from nothing. There could be political reasons to annex SCS islands, such as to test the US' response and try to demoralise Taiwanese people. Maybe it wouldn't happen before the next US election but if Biden's successor is looking potentially weak I can imagine Beijing doing it as a "safe" way to figure that new President out.
Then there's a question as to how much capacity Taiwan has for increasing submarine capabilities. I don't think it could hurry up the prototype submarine much without the danger of compromising the build even with more money. Once the prototype is completed more money might be helpful to create another production line to increase the pace of the build. But that's years off even if it's a good idea.
As for a completely new design, that would also take years to complete and complicate matters. I doubt Taiwan has the spare staff to build smaller submarines alongside the current program even if blueprints could be produced quickly. Much like with the current indigenous submarine, foreign assistance would be required. Does Japan, the US and Europe have the experience and equipment necessary to help? Taiwan could probably build something but would it be valuable or incredibly noisy/unreliable and easy for the PLAN to find and sink?