Because China doesn't need to go kinetic right now. It already got what it wanted from this, and India backed down. The PLA secured the territory which overlooks its logistical lines, and at the same time it is now sitting on top of India's supply lines. What happened in 2020 will have consequences in 2021, and so on. China's position will continue to get stronger, while India will keep falling behind.
As I mentioned months ago, this is all positioning on the board. If you make an aggressive move, you have to be prepared that the opponent will decide to trade units. Or, the opponent backs down, in which case, you continue advancing your position (without trading units.) Until the time comes when everything is set up in your favor. At that point, the opponent may just surrender without a fight.
India is hoping that China makes a mistake in its follow-up positioning moves. Or that some other factor comes in to save it (i.e. US). That's the only play it has. Short of that, China is controlling the pace and direction of this game now. So it's in China's interests to continue pressuring and positioning, until its advantage is so overwhelming that it can either go fully kinetic without any real risk, or India surrenders (strategically) without even a fight.
Another variable here, as Sawhney explained, is the integration with the Pakistani military (due to complete in the 2030 time frame), which will make this "two front war" into a "one front war", where both countries can fight a coordinated war against India. All of these things are positioning, along with all the rest of the geopolitical and economic factors which are now increasingly favoring China.