@rudyk1515 , agreeing with my colleague @TomD8 , and adding a few references ----
(a) generally the IRS rules on sourcing of income is recognized as same as your tax home I.e. where performed. Thus since you are living abroad ( Romania ) your income source is Romania and eligible for Foreign earned income exclusion ( since you are not employed by an embassy.
(b) For California purposes, the drive to Market based economy -- the sourcing is based on whom is the beneficiary of the work -- a customer based in CA or a customer's customer based in CA. It is a case of economic nexus. See this ref. ( you are an independent contractor doing business in CA and so the thresholds apply ) --> Doing business in California | FTB.ca.gov.
(c) I have no clue how they plan to enforce this when a business buys services from a person in China ( or any other country ) and directly pays an amount on the borderline of the threshold. But I understand why they are doing this.
Good Luck
