(edit to add: i.e. field test planned comms and sensors platforms for use in future conflict scenarios)
Tracking: satellites are incredibly easy to track once you know their orbital parameters. A balloon, far less so. You need a lot of active tracking.
Altitude: a balloon is much closer to the ground than a satellite. That allows a much smaller camera to take the same picture. It also could give you access to radio signals that might not be as easily monitored from space.
Harder to spot: being closer to the ground, it will be beyond the horizon until it's much closer.
And of course it's far, far cheaper. The Chinese space program is doing well, but it's still very expensive to build and launch satellites.
There are of course numerous downsides.
Measure Response: Determine what an adversary nation does in response to the violation (what resources are scrambled, where do they come from etc)
Messaging: All the permutations of two sets of government folks trying to send a message the pair mutually understand re: defense etc
Tie up resources: Low cost provocation may divert higher cost resources and tie them up for a longer period of time since its a dwelling threat
Acquire signal information: Use sensors and measurement systems outside of the threat to measure the locations and signatures of tracking systems deployed to assess and monitor the threat
Deploy lightweight physical payloads: dust something of interest over an area etc