The players are overthinking it; many are eyeing this territory, believing that if Starfire compromises, they can seize the key resource points.
In reality, that's impossible. Even if Starfire and Li Yao show a hint of weakness or compromise, countless people will swarm in to divvy up the territory completely.
The players' guild won't occupy it at all; they'll be driven out. They haven't realized they're merely being used as pawns to test Starfire and Li Yao's reactions.
Li Yao only had this realization when he saw the so-called United Army, and he thought of the ambassador's meaningful glance back then, forcing him to be cautious.
Thus, Li Yao's approach is so fierce; the goal is to show his determination and means to deter the petty ones, and to let those hidden figures know that if they try to extend their claws, they should be ready for him to strike.