The verse does not say that this is why it is forbidden, but that this will happen. In the case of Moshe and Tziporah, it was done before matan torah so that she converted according to the rules of that time before they married. As I explain in the answer to Was Intermarriage Permissible at the time of Tanakh?
Rus had converted before she married Boaz as explained in Sefer Rus (which is why Shmuel Hanavi wrote it to begin with). Had she not converted, King David would not have been a member of the tribe of Yehuda and could not have become king. Esther did not marry Achashveros, it was considered a rape and she lived with him because he took her against her will.
Kiddushin 8b points out that there is no such thing as a marriage with a non-Jew (someone who has not converted). Thus the child of a Jewish man and a non-Jewish woman is never Jewish in the first place.
Rav Hirsch explains that the verse you quote is a special case even if one of the seven nations attempts to convert, you should not marry them.
so the prohibition of marrying one of the Canaanite people can only
refer to a marriage after they have become Jews.
not only shall you not give your daughter to a son of a non-Jew where
you know beforehand that you are estranging your child and
grandchildren from Judaism, but even their daughter you shall not take
for your son, in which case you might think that the power of your
influence and that of your family would induce Jewish spirit and
Jewish ways in the Canaanite girl;