By looking at the info, my feeling is that the extra miles for oversea transactions in foreign currency is more like a offset of foreign currency conversion fee, right?

You see, you get 1 HKD for 2 HKD to 20HKD, and the conversion fee is like 2%? 1 for 2 is kind of an earning, but 1 for 20 just covers the conversion fee IMO...

Can I assume HK banks are doing to just to promote oversea usage of their cards? Any other benefits to them?

This is not like cards in the US that rewards has nothing to do with where you spend.