The majority of the almost 100 hostages who remain alive are believed to be male IDF soldiers or men of military reserve age. Hamas is expected to try to use to them in later phases to try to negotiate more significant concessions, including more high-level prisoners and a permanent end to the war.
Yes, they understand the difference, but seemingly not in the same way you do, they seem to think releasing soldiers could help end the conflict.
Edit: also your reply doesn’t address what I said.