The mil-mil dialogue, along with the guardrails proposal, is a trap that China should stay out of.Not to mention it's always important to hear what the opponent is saying and thinking. Even though a lot of what Blinken said is planned and scripted, it still provides insight on U.S.'s strategy towards China and what the next move will be. Cutting off all communications also means losing out on valuable intel.
That being said, I think the Chinese side is pretty clear on refusing to establish military to military communications and dialogue with Lloyd Austin. That is a separate issue where U.S. is essentially trying to get China to accept rules of military engagement (e.g. pushing China while at the same time telling China not to respond).
It's ironic the U.S. even mentioned their military to military communications with the USSR during the cold war, cause they are trying to get China to play the same game.
Americans want to talk to their Chinese counterparts to gauge what is their public and private (real) red line and then they will comfortably start doing all sorts of things to sling mud on China's face because they would know that they haven't touched China's (real) private red line.
By refusing such communications, China is leaving the US at the dark and is basically daring the US to do whatever it wants with the expectation that Chinese responses wil be unpredictable, a "normal" face slapping operation against China could easily result in the PLA swarming the area and escalating it at a moment's notice.
The US military, stretched as it is, doesn't like this kind of unpredictability and it would be impossible to start its usual constant face slapping operations because it would have to have significant backup forces on place everytime incase China escalates.
That's why mil-mil dialogue and guardrails are a trap. If the US is feeling so courageous and stronk, no problem, let them start doing things if they dare to leave the initiative to China on when to escalate.