...As far as the idea that a 'psi war' would kick off a 'no holds barred' counter reaction.. what is the difference between a traditional espionage/fifth column campaign and one that uses psionic operatives in a support role? Basically none to an outside observer. ...
... The role of psionic operatives in an indirect action force multiplier espionage/fifth column role would be to identify, suborn, (re)educate, coordinate and control the leaders and key players in the actual, non-psionic, espionage/fifth column organizations. Direct action by psionic operatives would be extremely rare outside of those roles.
But he also said:
...I would also argue that it is much easier to create chaos than order. ... The creation of such a disorganized buffer zone fits with stated Zhodani objectives.
...[list of varied disruptive operations]...
I'd expect, that even given detection and large area shielding technology, the entire Spinward Marches would be a hotbed of intrigue, espionage, counter espionage, terrorism, counter-terrorism, insurgency and counter-insurgency. Even keeping the region at a low-broil serves the Zhodani interests by not only tying up Imperial assets but by maintaining the nightmare threat of cutting the tail of any large Imperium task forces at will.
You contradict yourself nicely.
Zho agents in a traditional - which is to say, low key - espionage campaign might arouse a quick flash of local hostility where found, but not much more than that. Zho agents engaged in a low key fifth column campaign would be about what we had just before the FFW erupted - a few Ine Givar incidents here and there, a nasty lot of them where they held strength (Efate, for example), perhaps a couple of events like that business on Dinom. Noteworthy, worrisome, but nothing that's going to put the sector in chaos.
However, the more active the Zho get, the more attention they draw. Even our relatively low modern tech and capabilities are quite adequate to figure out what kind of capabilities a given group should have, to tell when a group is showing resources and skills that suggest active outside support, and to trace that support. To think that a TL-15 culture - or even a TL10 culture - is not going to be able to tell when local subversives start showing unusual levels of skills, resources, and activity, and that they won't draw the correct conclusions from that, requires an extraordinary degree of wishful thinking.
More to the point, Imperial culture is actively hostile to psionics in the first place. They're primed to suspect Zho influence even where there's not Zho influence. Think along the lines of the the U.S. in the '50's - not just anti-communist, but reflexively, fervently anti-communist to the point that people with legitimate grievances were often accused of being Communist stooges for daring to challenge the status quo. For a while there, it was a regular little witch hunt, we embarrassed ourselves mightily.
Now imagine that the Soviets of that era had ramped up their espionage/fifth column efforts within the U.S. by an order of magnitude. It would not have gone unnoticed, and it would have taken very little in the way of evidence for people to have convinced themselves the Sovs were behind it. The reaction would not be rational. It would be reflexive and emotional. Even knowing the price, that kind of thing might have led to war. People do incredibly bad things out of fear and hatred.
Your Zho face that problem. They can engage in low-key espionage. They can do a bit of clandestine support where insurgents are active. However, not every world is Efate. They'd have to work harder to rouse the local malcontents on a lot of worlds, they'd have to work a lot harder to turn the disaffected into an effective disruptive element on a lot of worlds, and the harder they work at it, the greater the risk of being caught at it. Worse, the more chaos they sow, the more willing people will be to blame them even in the absence of evidence, simply because the Zhos, being psis, are the preferred scapegoats.
Recall, one of the leading causes of the Psionic Suppression in the Imperium was the suspicion that the Institutes were evolving into a fifth column for Zhodani interests.
That's why the Zho effort has been more targeted than generalized. Turn Efate, and you isolate Jewell Subsector while the rest of the Marches goes on about their business, more concerned with the price of eggs than what happens around a distant star. Try to play that game on a more generalized front, and you'd find yourself summoning up the war fleets from the Zhodani core to counter the fleets coming up from the Imperial core to crush the Psionic Threat - and I'm pretty sure the Imperials have more ships.