The Chinese have shed a lot of blood in the past. About 14 million died in the 1937-45 China Japan war, only a small number are war casualties but lots of others died because of starvation and malnutrition. During the Great Leap forward by Mao in 1958-62 when Mao wanted to catapult China into the ranks of advanced nations (shades of Xi today), about 45 million Chinese died of starvation as villagers were forced into communes. So if Xi believes that he will achieve his goals and the price to be paid is the death of a few million Chinese citizens he will have no hesitation to do it. The reason he is holding back is that realization has probably dawned on him that this option, at this time, will not get him the results he wants and in fact will set China back by a few decades. So he will bide his time for now. The conflict will just get postponed.
Make no mistake, the Chinese are gamblers by nature. They are ready to gamble with money and they are ready to gamble with lives. It is no wonder that they are the biggest customers at all casinos globally. And their willingness to gamble with lives is well documented.
You have to also consider that by his recent purges of political opponents and with senior ranks of the armed forces and by overturning the system of regular replacement of the CCP General Secretaries set up by Deng, effectively Xi has put a mark on his own head. He is unlikely to live out his overthrow. So Xi is already gambling with his own life. It is not like democratic countries where a leader will lose the next election and retire. Xi could lose his life.
I doubt Chinese will throw as many lives as they did during the Mao regime. As prosperity of the nation increases, the capacity to take casualties decreases. Also China is an aging country and cannot afford to loose too many junior lives. If they have similar number of casualties as India, it throws water on superpower status. Also their military might is not so overwhelming that they can steamroll India, especially in mountain warfare.
Besides, if India loses and makes peace with China on their terms, then we would not need billion dollar Western arms after that, so it is in the interest of the West to make sure China does not win or atleast it gets a very difficult and marginal victory, if at all.
If India can stand out this winter, there is every chance PLA will rebel and overthrow Xi. Xi probably gambled that India will just allow him to win without a fight and he could bask in that glory. That wont happen now so perhaps it may turn out to be his last gamble.