Bitcoin users are creative enough to outplay the government restrictions, humans are good on that. Im not sure if what will be the next move of the Chinese government about it, ignoring it or criminalise the use of OTC and its way. This will be not good to its citizens itself, retracting the order of closing exchanges and put it back on is the best options they can do.
Next (and probably only) step is to prohibit any kind of service from having anything to do with crypto in its entirety. It would mean that even services purely focusing on OTC, or any other similar platform to LocalBitcoins, would have to shut down. I personally don't see this going anywhere, because as you said, people will always find a way to buy themselves into Bitcoin. But then again, it's China that we're talking about, so if they think banning crypto entirely is a viable option, they would certainly do so. It would also mean that the mining aspect there is also at risk, in case of a total ban. I expect anything from an insanely paranoid government such as China, so we'll see how this will play out.