Interested to know the outcome of this rule. A theoretical scenario: a child is born to Canadian parents on a country that practices jus sanguinis. If Canada won't recognize the child as Canadian citizen, the child will become a stateless person?
I've personally seen/know of a few cases, not specific to Canada, and can say with some confidence 'it depends.' Or, if you prefer, the question is under-specified - which countries and very specific circumstances matter.
Is it hypothetically possible? Possibly.
The reason, or one reason anyway, is that many of the legal set-ups in many countries do have more (or less) developed 'back-up' scenarios. One being UN conventions where countries commit to not allowing such cases to occur (usually understood to mean on their own territories but also sometimes w/r/t eg children of their citizens), some countries write those rules into law, etc.
But: not every possible scenario can be imagined in advance, and the regimes/rules of different countries collide in unexpected ways. And officials in different countries have different levels of authority and flexibility in application (discretionary authority) or conversely tradition of very strict attention to the rules. And in real life, officials also have their own idea of who they think 'should' take care of the situation; even if their own laws actually state pretty clearly (eg that a child born there without statehood 'must' receive citizenship), getting them to do it may not be easy.
In your hypothetical above, I can say that one country I spent time in would absolutely dig heels in and not issue passport (despite good laws on paper!) simply because their officials would assess that it's a child of Canadian citizens, Canada should deal with it. And I'm pretty confident Canadian officials would eventually get it done, somehow. (I have a hunch I know in broad terms how a determined consular official plus an IRCC senior person could get it done, too - IF the parents stipulated to a few conditions).
But details would really depend on circumstances. The case I knew of better had such a convoluted set of facts I won't try to detail, except to say ... wouldn't apply to Canada. Couldn't.
Now back to the current situation: quite possibly it will reduce the likelihood of such cases even further, so way too hypothetical to guess, either.