Yearley (in Experimental Essays on Chuang-tzu) describes Zhuangzi's mysticism primarily in terms of the sage's ability to positively respond to and engage with every event as it arises, while simultaneously releasing events as they pass. The world is ever-transforming (hua) and the sage fully harmonizes with this apparent reality. This is suggested in the imagery of the mind like a mirror: "The Consummate Person uses his mind like a mirror, rejecting nothing, welcoming nothing; responding but not storing. Thus he can handle all things without harm." (7:14; Ziporyn) I have suggested that this is a fruit of the mystical experience, not the experience itself. I have also suggested that the extreme position to which this leads Yearley in his interpretation of Zhuangzi is a consequence of his mistaking the fruit for the root.
Yearley offers this story as an example of the sage's behavior: He is walking in the forest with his wife, whom he loves most dearly, when a tree falls on her and smashes her to pulp. At first he is shocked and grieved, but almost immediately he releases these emotions and instead wonders at the beauty of blood as it mingles with the leaves and the interesting patterns created by shattered bone. How did we arrive at this? I can only imagine that in having taken a behavior which has its roots in organic and in-articulable experience and having codified it with reason, and having made it into a principle to be applied, we will be led to such an extreme.
What is missing here is the "ironic": the grief that is also not grief. This is neither grief alone, nor not-grief alone. It is both simultaneously, however incompatible. What is missing here is the root mystical experience that gives spontaneous rise to our responses to events, instead of the application of prescribed behaviors.
It is true that Zhuangzi released himself from the extremes of grief at the death of his wife and instead of wailing, sang as he beat out a tune on the bottom of a tub, but this does not mean he did not miss her still. It is just that he also had the larger view, the view that allowed him to grieve without despair.
I am reminded of the Zen story where an esteemed master who, while being killed by bandits, screamed like a banshee. A novice, having seen and heard this, is shaken in his esteem and suggests the master should have behaved otherwise. A nearby monk raps him on the head and says, “Fool, he screamed because he wanted to.” What is intraworldly about Zhuangzi’s mysticism is that it enables our full participation in the full gamut of human expression while never being ruled by any of it.
You can check out Scott's writings on Zhuangzi here.