What happened here isn't a case of the government going insane. What happened here is the case of the government making a hypothesis and then being completely wrong about the hypothesis.
China isn't the only country that has been wrong. Parts of the US was definitely wrong about the pandemic in the initial stages and they suffered for it as a result.
If omnicron turned out to be as lethal as ebola or equivalent than China took the right action. That is really all there is too it. They took appropriate action for a coming disaster and they turned out to be wrong about the disaster.
The interesting thing here is not the fact that China was wrong. The interesting thing is that if China was right, then China is literally the only first world country with the capability to execute these drastic measures at a massive scale. From these massive lock downs to the creation of hospitals to deal with the fallout in mere weeks... illustrates the true controversies between authoritarian and democratic governments.
As a US citizen I grew up indoctrinated on freedom and democracy. But the truth is actually not so black and white. Either way I know which government I'd rather be under if a zombie outbreak broke out.