Israel is actually usually willing to free hostages in deals like this, at a high ratio compared to the number of Israelis freed. To Israel, Palestinian hostages are a dime a dozen, most are arrested with little/no clause, and if they ever see a court, it’s a sham military court to just rubber stamp any charges and sentences the IDF wants to hand out. Israel returns hundreds of hostages because they’ll just abduct as many more in the same time period with similarly suspect reasons. It allows them to fulfill their treaty obligations while not really doing so in spirit.

Israel does this all the time. Prisoner / hostage swap is pretty much standard operating procedure. It's why Hamas took hostages in the first place. Israel already traded back 240 Palestinian prisoners during the first truce back in November.

https://en.wikipedia.org/wiki/2023_Israeli%E2%80%93Palestinian_prisoner_exchange

What's going on now is negotiations. How many prisoners, exactly which ones, etc. The specific prisoners is likely the more salient point because Israel has effectively an inexhaustible source of Palestinian prisoners. It's a renewable resource. Meanwhile Hamas needs decades to plan a border raid so it can get a few hundred hostages to trade away.