Does this article claim that Australian citizens of Chinese ethnicity are seeking asylum in China to flee COVID-19? (大多数华裔恐怕只是把中国当成了一处避难所而已)
Yes. This article claims that Australian citizens of Chinese ethnicity are seeking asylum in China to flee COVID-19 and yet they failed.


很大程度上 in this sentence means "in a considerable degree". So 很大程度上是因为 can be translated as "this is largely because ... "
只是 …… 而已 means "it's just ... ". 
恐怕 is an adverb in this sentence which indicates very likely speculation that means "perhaps" and "maybe", not a verb meaning "afraid" or "fear".


Here are some more examples of 恐怕 as an adverb.


  天恐怕要下雨了
  
  It looks like it’s going to rain.
  
  他的英语恐怕是说得最好的了。
  
  He probably speaks the best English.