This kind of bluster is a mainstay of Chinese geopolitics. The law was intentionally written in an open-ended way so that the party always gets the final say on what "completely exhausted" should mean. It serves as a propaganda tool internally and a point of leverage externally -- the party never needs to actually act on the threat for it to serve a valuable purpose.
With that being said, it's not that simple. Bluster isn't just a political tactic -- it also enables the military to slowly chip away at norms and edge closer towards a strategic advantage (e.g.: progressively violating more and more of Taiwan's sovereign airspace). If the party could have things their way, the military would merely continue pushing the envelope until one day a D-Day assault force seemingly randomly washes up on Taiwan's doorstep.
With that being said, it's not that simple. Bluster isn't just a political tactic -- it also enables the military to slowly chip away at norms and edge closer towards a strategic advantage (e.g.: progressively violating more and more of Taiwan's sovereign airspace). If the party could have things their way, the military would merely continue pushing the envelope until one day a D-Day assault force seemingly randomly washes up on Taiwan's doorstep.