Are you saying that the CCP just wants to lock up people for the perverse pleasure of having random people locked up?

Regimes lock up particular people when particular people are a threat. They may lock people up unnecessarily just to err on the side of caution. But if they overdo it it can backfire. So far the main reason I hear from Chinese people to criticize Xi and the CCP is mostly about COVID and lockdowns, and never for any of the reasons westerners point the finger against the regime

It's sort of a neo-hukou system? A positive covid signal is basically house arrest. Since they do covid tests in batches of 20, it is expected to get false positives.