It appears that the recent tension with China over the sail-by of the guided-missile destroyer USS Lassen near the Subi Reef was very carefully chosen in order to send a strong message about their over-reaching claims in the South China Sea without fear of escalation.
The Subi Reef is located in the Spratly Islands, a loose collection of small islands and reefs. According to Wikipedia, the Spratly Islands total only about 4 square kilometers of land spread amongst 425,000 square kilometers of ocean. All or portions of the island chain are claimed by China, the Philippines, Taiwan, Malaysia, Vietnam, and Brunei, and all of the countries listed, except Brunei, also have at least a small military presence on at least one of the islands.
With so many claims on such little land, several of the countries have done small amount of reclamation - building up islands and reefs to support larger runways, more personnel, etc. - but according to Patrick Cronin, senior director of the Asia-Pacific Security Program at the Center for a New American Security, "China has done 17 times as much [reclamation] in the last 20 months", as other countries have done in the previous 4 decades.
Subi Reef alone has had 976 acres of landfill added to support the facilities that are built there. China has also been adding to two additional reefs, Mischief Reef and Fiery Cross Reef. Both are currently larger than Subi Reef, and Fiery Cross is being built up in order to support a 10,000 foot-long runway.
Before this reclamation of Subi Reef started, it was very likely submerged at high tide, which means that China cannot claim the water around it as territorial waters - even if they add material to it to make it a sizable island. If the reef was above the water at high tide and could be claimed as China's territorial water, other countries would still have the right of "innocent passage" - the right of one country's vessels to pass through the territorial waters of another country without notification.
Instead, when the USS Lassen sailed within the 12-mile border around Subi Reef that would be China's territorial water (if the claim is valid), China's Foreign Ministry said that the US action threatened "China’s sovereignty and security interests”, they warned the US “not to act blindly or create trouble out of nothing”, and they summoned the US Ambassador in China in order to protest the action.
The Lassen was also shadowed during the entire freedom-of-navigation exercise by a Chinese Type 052C guided missile destroyer and a Russian Sovremennyy Class patrol destroyer. The Type 052C is one of China's most modern warships, and comparable in class and mission to the USS Lassen. In addition to shadowing the US warship, the Chinese ship also continuously issued a warning to leave Chinese territorial waters.
This incident is not the first conflict between the US and China in this area. In May of this year, a US Navy P-8A Poseiden surveillance aircraft that was flying near (but not inside) the 12-mile exclusionary zone around Fiery Cross Reef was told repeatedly to leave the area by a Chinese military controller, and a US warship that sailed through the Spratly's was shadowed by a Chinese warship.
Many US allies in the area were glad to see China's territorial claims to the entire Spratly archipelago finally challenged, and while the US has said that this operation will be repeated to ensure free and open navigation in the area, only time will tell.