He went for direct offence knowing fully well that India will respond.
I don't think he expected this response. In the past it was usually India calling for flag meeting. In Ladakh in 2014, the troops were mobilised but that was in Indian territory.
Xi, CPC and PLA probably thought that would be the limit of Indian response, surgical strikes not withstanding. If you see some of the comments being made by their leaders, junior and senior officials and 50 centers on various fora, they have been bleating about "India should stay in limits and we are not Pakistan".
Do remember, Chinese are really interested in the regions proximal to Tibet border- Tawang being the prime one and of course parts of Arunachal and Sikkim and Ladkah and Uttarakhand. This is to ensure that no centre of Tibetan cultural or spiritual heritage remains beyond their control- every key monastery, every significant village must fly the CPC flag is their dream. In fact this has been the dream of all Chinese governments, including the RoC. That it will destabilise and weaken India is a huge bonus for them.
This incursion was about probing our redlines, testing our responses, mobilisation and resolve- plain and simple. It must also be remembered that only recently the first of the M777s that are primarily meant for China border have arrived in India after a decade of dilly dallying. Soon they'll start getting deployed along the frontier, probably starting with Sikkim to reinforce our strategic and tactical dominance in this very area. This is coupled with increased infrastructure projects in the area.
Once that happens, Chinese can kiss good bye to attempting to use Chumbi valley to make a thrust into the Siliguri corridor. Hence, these accelerated and frantic attempts at gobbling up Bhutanese territory that will ensure that their logistics are able to skirt around the artillery range and allow for future.