Hostage trade + Ceasefire is probably the worst decision Israel could've done.
Not only are they directly rewarding hostage-taking, they're giving them a HUGE ceasefire window.
Hamas will use this to smuggle in supplies/personnel, move their human shields around, stage more propaganda, contact/plan with sympathetic outside groups, and generally dig in deeper.
And all the pro-Palestinian groups will see this as a victory for their stupid, disruptive protests and use it to keep pushing for Israel to end the fighting in Gaza.
Basically all the stuff they were avoiding by keeping the area locked down and under constant attack.
My only guess at why they'd be considering this is that they expect the hostages to have horror stories about Hamas for the PR war and that they expect Hamas to chimp out and violate the ceasefire, giving them more cause to never stop the attack.