I tried to look up and found some interesting stuff:
- This book called Pacific War and the Importance of 'Magic' by Keiichiro Komatsu mentions that 事件 means an event and thus is adequately translated as incident and 事変 means emergency, something more serious and just an event. (Source: Origins of the Pacific War and the Importance of 'Magic’)
- I also found a comment made by an user Akira Takizawa on axis history forums: China Incident is not Jiken, but Jihen. Jihen has a meaning of the armed clash without declaring the war in Japanese. (Source: Incident as a special Japanese term for a war?)
Can anyone throw some more light on this?