By disallowing TLS 1.3 and almost certainly future versions of TLS when they arrive, China blocks evolution of encryption technology. Likewise, by blocking ESNI, they ensure that their Great Firewall can continue to determine to which site the user is trying to connect.
Vulnerabilities will eventually be found in TLS 1.2, just like they have in earlier versions (Mozilla and Google just disabled TLS 1.0 and 1.1 support by default due to their weaknesses) and China will, no doubt, exploit them to spy their citizens.
TLS had the promise of allowing secure communication over the Internet, for the purpose of e.g. buying things without fear that someone in between could capture your credit card number. It's sad to see that authoritarian regimes still have ways around it.
