I think they are smart enough to realize that military intervention would blow the lid of this thing domestically and create a huge outrage internationally. The Tienanmen protests was the closest they got to revolution since Mao created the modern China state. The only reason military intervention worked at the time was because they had a local population with an active memory of Mao's oppression and total control of media. Lots of communist regimes collapsed at the time and the Chinese got pretty close as well. They don't want a repeat of that and they have plenty of places across China where they've been working hard on keeping a lid on local unrest.

Hong Kong was in British hands throughout last century and has an active memory of how things used to be before the handover. Also, they remember Tienanmen. There are numerous ties to the outside world in Hong Kong as well as to the rest of China because of family ties, trade, local freedom of press, etc. A military intervention would be impossible to hide domestically. Spin off protests in e.g. Bejing and other Chinese cities are at this point unlikely but not unimaginable if they don't contain this. Even if this doesn't happen, the mere possibility of this might be enough to weaken the current leadership and the fear of that is very much informing current actions. Tienanmen remains a taboo topic in China out of fear of something like this happening again. The last thing they want is this spreading.

They don't fear revolution as much as political leadership change. Xi Ling Ping's grip on leadership is being weakened by this. He and the people he put in positions of power need this to go away. The sooner the better.

So, what I expect is the Chinese finding a creative way to de-escalate this such that Hong Kong goes back to business as usual. It will probably involve a way of sacrificing Carrie Lam, who at this point is the very definition of a lame duck and the focal point of the protests. Speculation of her stepping down has been rampant for weeks. Probably they are slowly coming to the conclusion that keeping her around is not helping the situation. Removing her would allow the protests to calm down and allow business as usual to resume. I imagine business as usual sounds pretty good in Bejing at this point. I'm guessing that as this drags on, they are warming to getting rid of her sooner rather than later. I'd be very surprised if she's still around a month from now.