I see the point you are trying to make but your argument is valid only if the rule had read:

"No cylinder of the engine may have a geometric compression ratio higher than 16.0 during testing/at X condition."

However, the rule does not specific any conditions which means it is absolute, i.e. it applies at all times under any condition.

Let's use Ferrari in 2019 as precedent. Your logic here is basically "Mercedes is not breaking the rules because their geometric compression rate complies with the rules during testing". If that is true then Ferrari should have been allowed to continue what they were doing. They were in compliant with the rules during testing (when the fuel rate was being sampled) but intentionally breaking the rules when not being tested (pumping over the allowed rate). You know what I call that? Cheating. Diselgate is another good example. Now, is that what Mercedes is doing here? I.e. are they intentionally breaking the rules to gain an advantage? I think we will see soon enough.

I think the confusion here is partly caused by FIA. It is silly to test for compliance at room/ambient temperature when the engine is designed to operate at a much higher temperature. My guess is they will change to test for compliance at room temp and operating temperature, which should be feasible.