The question is, what can they really do to prevent a Tulku or a Lama from being recognized? Even if the authorities can limit the influence of such figures, but Tibet is a big place with borders that are hard to secure. It wouldn't be impossible to get any such boy out of the country where he could be invested with his office in exile, as is the current Dalai Lama. In any case, the government cannot prevent the spiritual process of reincarnation any more than they could command a Christian to go to heaven or hell.