As the world knows by now, on Oct 27, the USS Lassen - an Aegis guided-missile destroyer based in Yokusuka, Japan - sailed within 12 nautical miles of China-claimed and occupied Subi and Mischief reefs in the South China Sea.

China's initial response was anger - but so far subdued - leading some to speculate that the Lassen incident was a tempest in a teacup and that the United States and China have put it behind them.

Despite the Lassen incident, the navy chiefs of China and the US were quick to declare that their bilateral exchanges would continue.

For its part, there was no US bragging and even reluctance to discuss details. The US did declare that the Freedom of Navigation (FON) exercise was "successful". Some analysts concluded that China was unable or unwilling to respond. But this shadow play at sea is not over and China must be considering its options and their implications.

Indeed, this is only the most recent of many more FON operations to come - at least eight a year in the South China Sea.

Admiral Harry Harris, commander of the US Pacific Command, has confirmed that the US would continue "regular air and naval patrols in the region to assert freedom of navigation in the area". The US seems intent on demonstrating that it is the primary power in the region.

But in this particular case, the Lassen reportedly turned off its fire control radar and did not launch or receive aircraft, compatible with the provisions of "innocent passage" in a territorial sea under the United Nations Convention on the Law of the Sea (Unclos).

Moreover, US naval aircraft accompanying it stayed outside the 12 nautical mile territorial sea limit which could be sovereign airspace.

To be demonstrating freedom of navigation on the "high seas", the Lassen should have been undertaking operations allowed only on the "high seas", like manoeuvring, using active and passive radar, and launching and receiving aircraft.

Despite having been given - through Pentagon leaks - what amounted to several months of prior notice, the operation seemed to catch China's Foreign Ministry by surprise.

It also embarrassed President Xi Jinping, coming so soon after his visit to the US and his meeting with President Barack Obama - and just as Mr Xi was convening a high-level Communist Party meeting on future economic strategy.

China's Foreign Ministry said "relevant actions by the US naval vessel threatened China's sovereignty and security interest". In so doing, it fell into a US trap.

As Subi and Mischief reefs were only low-tide elevations before China piled sand and built structures on them, under the Law of the Sea they cannot be claimed as sovereign territory and are thus not entitled to a 12 nautical mile territorial sea.

Moreover, as China has never declared baselines from the Spratlys, it has no official claim to territorial seas from them. So the only way the passage could have been a threat to its sovereignty would be if China's ambiguous nine-dash-line claim is one to sovereignty over all features - including low-tide elevations - and waters within it. In other words, it would appear that China has indirectly confirmed this claim, which is not supported by Unclos.

However, the ironic twist of this US tilting at windmills is that if the Lassen made a purposeful "innocent passage", it tacitly recognised a Chinese claim to sovereignty over the low-tide elevations. Ambiguity in FON operations appears counter-productive.

China now has several non-mutually exclusive options - most of them not good for it or the region.

It could simply carry on reclaiming and constructing on submerged features and rocks and islands, as well as "militarise" (whatever that means) the existing features, and shrug off protests by other claimants and the US.

This would mean that agreement on a "binding" Code of Conduct would be even more elusive and that Asean-China and US-China relations will deteriorate further - but not break.

China could obstruct future US FON operations with its coast guard or fishing vessels. This would heighten tension and make "accidents" more likely.

It might also declare an air defence identification zone off its mainland South China Sea coast. This would not include any disputed areas except the Paracels and adjacent waters - but that is an issue only between China and Vietnam. Presumably the US would promptly violate it with military aircraft if it had any prior-notification provisions.

In a worst-case scenario, China would use military vessels and aircraft to confront the FON vessels and aircraft and demand they leave "Chinese waters and airspace" and try to make them do so.

In that case, all bets are off and the region and US-China relations would commence a downward spiral towards conflict, including squeezing the Asean countries in between.

This is not likely - not yet.

All, including China and the US, have too much at stake. But it is not impossible - especially if in China's eyes the US keeps poking and provoking it.

Already, cracks have started to appear in Asean. Indonesia's Coordinating Minister for Political, Legal and Security Affairs, Mr Luhut Pandjaitan, criticised the US action, saying "we disagree, we don't like any power projection".

The best scenario is one in which China withdraws its nine-dash line claim or clarifies that it only indicates its claim to sovereignty over all rocks and islands within it.

It would then explain that it claims 200 nautical miles of Exclusive Economic Zones and continental shelves from several of the islands, and that it is willing to negotiate boundaries between its claims and those of others.

Relations between China and the region would greatly improve. This scenario is also highly unlikely, but one can always hope for the best - while preparing for the worst.

•The writer is adjunct senior scholar at the National Institute for South China Sea Studies in Haikou, China.