I just attempted to explain it to you.
Israel claims that it has a right to it and it build on it to assert that right.
But Israel did not annex it because it has always been willing to concede large portions of it in exchange for a genuine peace.
In any event the area is in dispute. It is not occupied by any legitimate legal definition because it does not lawfully belong to anyone else.
I never argued that Israel didn't have a right to build the settlements outside of the annexed areas. I always thought it was a stupid idea to build them deep into areas with a heavy Palestinian population because you don't want the eventual recognized international border of Israel to encompass enough Palestinians to fundamentally change the demographics of Israel.
The last thing Israel should want to do is to annex the entire West Bank, because Israel will quickly become an arab state.
In my opinion, although the Israelis vehemently deny it, the wall that is being built will undoubtedly become the international border of Israel. I don't see any other outcome.