Encroachment?
Do you understand the meaning of the word?
You need to own the place for the other to encroach and the world does not acknowledge nor recognize PRC's foolish nine dash claims so for the people outside of mainland China, the encroachment is by PRC developing those artificial islands not the US practicing their natural rights of freedom of passage within international waters.
It is encroachment to China because they believe it is their territory. So technically this is correct from their perspective and I'm addressing the issue from their perspective if you understand the context of this specific discussion. From the perspective of the world, it is indeed China encroaching on what was previously international waters, through the acquisition of claimed islands. That's the dispute though. Borders are not static forever. Therefore it stands to reason that disputes can change borders and if two groups are disputing a set of borders (two groups being China's claim of islands and surrounding seas and the collective side that is against that claim), then the meaning of the word encroachment will be different for both parties. But okay I understand your point because it is also valid. My post was providing one explanation for why China insists on claiming those unclaimed islands so naturally I used the word from the Chinese POV. I would imagine it to be insanely irresponsible for the PRC to NOT claim those islands and allow the US to exert its naval power over the region in future. Opening up this venue for them is a strategic blunder. Even if no consequences exist in near or mid future.
China needs to distance its mainland from US naval power. History has taught all planners this many times over. If those islands are Chinese sovereignty, the waters surrounding them will prevent the US navy from operating anywhere near the seas surrounding China, thus preventing them from cutting off shipping lanes. These waters are strategically important for China's trade and access to the energy it requires for survival and growth. Leaving it open for the US (which already has a far superior navy) will be opening up a channel for economic ruin and starving Chinese citizens of energy and income. This may or may not be their intention, but it would be stupid to allow this.
If the US is genuinely concerned that this means China gets a stranglehold on Taiwan, they need not be worried. A conventional engagement is out of question for China with or without sovereignty over those waters if China were to act as a aggressor and hence give reason for the US to utilise its navy. In fact I'm certain that the US will push for Taiwan independence as soon as it becomes 100% clear and begrudgingly accepted that China owns those islands (which won't happen for a long time to come if ever). That would become the logical move for a sinister US to play, if they don't then I am entirely wrong about the US' intentions in the region or their strategy has shifted.
If the US is concerned about this purely on principle, it will have to engage the PRC or it will need to back away because US planners understand how important these seas are for China's economic and social survival so it is unlikely China will ever budge on this issue. The only chance the US has would be military conflict or changing Chinese policy by other means. One source of leverage the US is starting to push on is trade.
Out of curiousity, how would you rather all stakeholders involved resolve this dilemma? Allow the Japanese or the US to make claims and unilaterally purchase those islands from themselves so the owner is a private stateless entity?