a plausibly deniable payload purpose

Any 'useful' payload would erase any plausible deniability. If the idea is to merely drop a piece of scrap metal on some politicians house or something, with no warhead involved, I don't think they can do that. Reentry is too chaotic for a piece of unguided rocket debris to hit a target that exactly.

How is "Chinese space junk falls on important target" plausibly deniable? Especially compared to alternatives that conceal source?

It sounds good, but I'm struggling to think of a use case for (1) an important enough target to be impactful, (2) that could be effected by space debris, (3) for which there's a distinction between "we accidentally hit it" vs "we deliberately hit it"

I don't think China cares. At all.

But in this case there are plenty of other, better delivery mechanisms than disguising the payload as space junk.