How did Portugal survive as a enclave within Spain?

Well it didn't always. From 1580 to 1640 Portugal was one of the kingdoms ruled over by the Spanish kings. Phillip II of Spain was Phillip I of Portugal. So when the rest of Iberia was being absorbed into a united kingdom, Portugal was also absorbed, just like all the others.

And for the 60 years it was part of the united crown, it was vaguely to moderately unhappy. The Spanish Kings were relatively generous to Portuguese nobility. But they were relatively indifferent to Portuguese interests. Particularly during this period the Portuguese were losing ground to the Dutch. In fact much of Brazil was occupied by the Dutch. Also during this period traditional allies like the English and French were suddenly antagonistic. And the Portuguese were having to deal with English and French privateers in a way they hadn't had to do before. The Portuguese were underwriting Spanish interests in Europe that Portugal had no interest in themselves.

So by the time Phillip III came along, the Portuguese decided they wanted back out. And it was a good time to go. The English and French were both (still) antagonistic to Spain and helped. And Spain was actively fighting in the Low Countries, Catalonia, and Italy. Spain didn't recognize Portuguese independence for decades the Restoration War lasted until 1669. But functionally they were free in 1640.

After that the Spanish were already past their apex of power. Portugal had renewed their treaty of defense against Spain with England. And the French were a constant threat to Spain as well. Any attempt by Spain to regain Portugal was very likely to result in a coalition against them. And the border was rough, fortified, and highly defendable.