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One thing to keep in mind is while there are a number of wuxia style films featuring things like Fox Demons and other elements of Chinese mythology, these are not strictly speaking, wuxia. Rather my understanding is they are a genre known as Xian Xia (which might be translated as immortal heroes). Wuxia has some supernatural features of its own but they are very specific. The reason I bring up this distinction is because people looking to run a wuxia-inspired campaign will often come from one of two camps: those deicing a more grounded, strict wuxia setting, and those who want more supernatural.
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In my own Wandering Heroes of Ogre Gate campaign, I tend to alternate. I usually do a few character focused sessions that are straight wuxia. These are typically adventures that deal with conflicts between sects, quests for manuals containing powerful Kung Fu Techniques, etc. But I mix this up with an occasional Fox Demon or ghost adventure. For me, this works because overall it has the feel of Return of Condor Heroes but I have the flexibility I need to keep things interesting for the players when they need a change of pace. It also means, if I want to do dungeon crawls, I don't have to limit myself to traps, riddles and human foes; I can throw in monsters as well.
I think this makes for a richer campaign overall. To use some examples this means you can run something like Come Drink With Me or The One-Armed Swordsman but also pull off Painted Skin or Zu Warriors from the Magic Mountain. In the end, I think it is about having options as a GM.
If you follow our most recent playtest reports (HERE) you can see this has led to some interesting places. The party is largely concerned itself with sect conflict and finding something called the Phoenix Crown of Bao. But they also encountered talking monkeys, immortals and are presently chasing after a fox demon. For us this is working out very well, and for me personally I find I am able to draw on the kinds of sources that interest me.
In the next couple of days I should have some updates on the system itself.