Chinese government repression is not inscrutably arbitrary, but instead primarily focused against threats to the regime. That also means that there is room for compromise and limited tolerance of protests that do not fundamentally threaten the regime.
Even with the incident on Tiananmen square on June 4th 1989, typically held up as the prime example of Chinese government repression, we can see that in the lead up the government was willing to make some compromises and opened dialogue with the protestors. The point where the government turned to repression was the point when senior officials started feeling that the protests had begun to threaten the fundamental political order. The internal division among the top officials before the fateful vote for martial law was between those who felt the protests threatened to overthrow the regime itself, and those that felt the movement only wanted reforms. In other words, the difference was between those who saw the movement as fundamentally anti-Party and those who saw it as demanding reform within the system.
This distinction continues into the modern day in the policy of the government. Environmental protestors are substantially less repressed than other types of protestors and the (central) government does often accede to localized protests with localized demands. Protestors in Hunan protesting mismanagement by local rural banks succeeded in getting the central government to announce compensation for their deposits. Protests about delays in construction of pre-sold homes related to the recent real estate crisis succeeded in causing the government to place pressure on developers to accelerate construction and the government pressed banks to give developers the liquidity they need. The case of the chained trafficked woman and the beating in a restaurant of a woman who rejected a man's advances, both led to arrests after national outrage happened. The common thread running through all of this is that none of these protests have demands that fundamentally threaten the political order of the regime.
Contrast the attitude of the government in those cases to the ruthless attitude towards Uyghur and Tibetan separatism, both of which make demands that necessarily threaten the stability of the current regime.
Even with the Hong Kong protests, whose demands for political reforms did fundamentally threaten the political order of the regime, the government did give concessions to begin with, like withdrawing the extradition bill. But note that withdrawing the bill did not relate to any of the demands for political reforms the protestors put forth.
On a side note, it's true that many of these protests are still repressed to some degree. But it's important here to distinguish between the central government and local governments, the latter of which often takes a more heavy-handed approach to protestors in general because local protests aren't good for the political careers of local political leaders, and oftentimes, the central government is somewhat more conciliatory than local governments.
In sum, the Chinese government does not repress for the sake of repression. It is pragmatic, and selectively represses protests and social movements that threaten the fundamental nature of the political order, while it is more open to compromise when demands do not threaten the fundamental nature of the political order.
In the case of the COVID protests, the demands of protestors for the government to relax pandemic restrictions clearly is not a fundamental threat to the political order of the regime, so it's not surprising that the government is willing to compromise.