They couldn't escalate without a baker. Suppose they do what you say, and then it's a non-negligible chance that the next trespasser is a Nordlandian army, and the one after that is Imperial army, and they don't like their chances of beating it. Sure, the probability of that happening isn't high, but can they risk it? Is it worth a few trees? Can they keep risking it if peasant trespassing continues regardless? Doesn't it look like intentional provocation, hmm?
As soon as they allied Middenland they proceeded to enforce their claims.
I mean they probably can kill the hell out of one Norland army, now and in the past and for that matter an imperial army.... so long as it is on their ground. The trouble is the more you fight in the forest the more you damage it. If an Imperial soldier gets hit by arrows from a tree he is going to cut down the tree.
I think the issue is more with individuals and small groups, you cannot stop those with an army and fey watchers can only do so much expecially when the prize is so great. As far as I can tell the best way to deal with that would be to push human habitation out of the woods entirely, but that was the sort of thing that would normally have summoned a large imperial response, and then one after that. Humans make more humans a hell of a lot faster than elves make more elves. In a war of attrition Laurelorn looses.