Fair question. Yes, the Celestial Dragon Emperor still rules over Grand Cathay. He spends his time in the Celestial City above Wei-Jin, contemplating the destiny of the empire with his wife, the equally revered Moon Empress. They are the true 'power couple' of the Warhammer World, older than most of the gods, for they existed when the planet was colder, before even the Old Ones came and pulled it closer to the sun.
As they rarely leave the Celestial Court and their power level is, frankly, on par with most gods, we knew they were not the right candidates to be Cathay's Legendary Lords – in much the same way you're not actually playing and deploying Khorne or Nurgle to the battlefield. Instead, their children provide a much more interesting prospect for the game, they are still extremely powerful characters with compelling family dynamics (spoiler, the siblings don't get on), but with all the responsibilities of ruling and protecting great swathes of Cathay.