No, you can convert USDT directly to USD. However, Bitfinex can only wire you that USD to a Taiwanese bank account. I can't verify that they actually will wire it, but this is what they claim. And I assume if they were refusing to make these wires to people who had Taiwanese bank accounts, people would be pointing it out.
Actually, it looks like sometime in the past few weeks Tether changed their terms to say they do let you redeem your USDT:
"About Tether Tokens; General Restrictions: Tether issues and redeems Tether Tokens. Tether Tokens may be used, kept, or exchanged online wherever parties are willing to accept Tether Tokens. Tether Tokens are fully backed by the currency or property used to purchase them at issuance. Tether Tokens are denominated in a range of currencies. For example, if you purchase EURT, your Tethers are fully backed by Euros. If you cause to be issued EURT 100.00, Tether holds €100.00 to back those Tether Tokens. The range of currencies available to denominate Tether Tokens is within the sole control and at the sole and absolute discretion of Tether. Tether Tokens are backed by money, but they are not money themselves. Tether will not issue Tether Tokens for consideration that is other Digital Tokens (for example, bitcoin), and will not redeem Tether Tokens for other Digital Tokens; only money will be accepted upon issuance, and only money will be provided upon redemption.In order to cause Tether Tokens to be issued or redeemed by Tether, you must be a verified customer of Tether. No exceptions will be made to this provision. "
(all typos and spacing are theirs. This change looks very hastily put together and quite sketchy)
The catch is now "you must be a verified customer", and registration is conveniently closed for the time being. Users who got in before registration closed report it taking months to get verified. Also, no US citizens allowed.
They're doing their best to put up a good face here but good luck actually getting them to hand over cash. The thing is blatantly scammy, they obviously don't have $2.3 billion in cash reserves on hand and never did.
