Quick history lesson.
Of course, this plan had been immediately rejected by Truman and was immediately shutdown but what if it hadn't?
While MacArthur was insubordinate and undercut Washington's direction (which is why he was fired), I've never seen any evidence at the time that he actually threatened unilateral nuclear war. Truman claimed that was one of the reasons he fired MacArthur, but was later forced to retract his statements after MacArthur threatened him with legal action over it. Truman admitted that MacArthur never
actually said any of that, but it was just Truman's
impression that the general wanted to nuke China.
There was some contingency planning between MacArthur's HQ and the Joint Chiefs for the possible use of nuclear weapons against China, but there's no indication that was undertaken in a way that undercut Truman's authority.
In any case, the attempt to bomb within China would have likely run straight into the Sino-Soviet Fighter and Air Defense units deployed into the country for exactly this purpose. Some or all of the atomic bombers might be shot down, depending on how their luck breaks. Maybe even all of them, although that is very low probability. The follow up conventional bombing units sent against Manchuria and China proper would have certainly rapidly been rendered combat ineffective from aggressive Sino-Soviet interception, based on the loss rates from similar such interceptions during the Korean War proper. Particularly since none of the plans I've seen intended to target air bases or their depots.
In Korea itself, the bombings undoubtedly would have succeeded and casualty rates would have been low, as per OTL, but then the USAAF levelled most of the country anyways with conventional weapons and that failed to sever the Sino-Korean Communists supply lines. In fact, after the summer of 1950, Sino-Korean supply throughput steadily increased right up to the last years of the war. So while whatever atomic bombs are dropped within Korea would likely have some short-term impact on Chinese military forces, it would be a temporary reprieve from a tactical-operational standpoint.
Moving up to the wider strategic-grand strategic picture, whether whatever proportion of the 34 atomic bombs that are directed against China (and successfully delivered) would have been enough to to do more than wound the Chinese or convince them to quit is dubious. While they would be hurt, their fears about American aggression against their homeland would have been more than confirmed and the precautionary undertaken relocation of industry into their interior combined with continued influx of weaponry from the USSR itself would mean they would still have the means to continue fighting. It's thus conceivable they would have responded by by committing even more resources to the Korean theater in order to try and drive the Americans off. Even if they do throw in the towel, their aggrieved hostility to the Americans would see them now hold fast as Soviet allies, meaning no Sino-Soviet split.
Meanwhile,
the expenditure of scarce American military resources that were already overstretched combined with the loss of political capitol among allies and third-parties (who were desperately against escalation) may have opened up avenues for the Soviets to act in the Middle East or Europe.
So the best case for the Americans here is they convince the Chinese to quit and relinquish Korea... at the cost of ensuring that China will remain a staunch Soviet ally for the foreseeable and possibly enabling further Soviet expansionism elsewhere, in regions that are much more vital to US interests then Korea.
