Yes, so let's sit down and analyse this a little:
Yellow Sea borders China, S. Korea and N. Korea; south of Japan Sea borders S.Korea, N.Korea and Japan.
The US and S. Korea military exercise by name is designed to target N. Korea only and not designed to threaten any other country -- given that China is not in the military alliance of the US/S.Korea/Japan pack and does not have any direct/live communication on this exercise (so misunderstanding is more likely to occur), taken into account of the long range lethal weapons used in this exercise, why would any friendly and considerate country want to choose Yellow sea over south of Japan Sea?
There are two answers to this -- First possible answer: the US didn't think of it initially, and didn't think that China would mind. When China voiced concerns about its own safety, a considerate US administration should offer to use south Japan sea without hesitation, but instead the US insisted on exercising in "any international waters as it wants" shows that the US administration is neither friendly nor considerate to another country that is deemed as non-ally. Alternative explanation -- the US wants to use this location and it wants to threaten China's safety in the name of N. Korea. Either explanation would warrant a complaint from China, and when the exercise was eventually relocated to japan sea, China stopped complaining of being threatened. This is very different from when China and Turkey did an exercise that is half way around the world from the US and the US complains. It is precisely this kind of arrogant attitude consistently demonstrated by the US administration on the international stage that alienates itself even from other NATO members.