Lamb's book makes it clear that the Simla Convention was an unsuccessful gambit in a game of multi-dimensional chess played between Great Britain, British India, Tibet, China, Russia, and Mongolia, and involving interests in Afghanistan, Persia, Nepal, Sinkang and Burma. Although Great Britain and British India were the driving force behind Simla and most key developments are documented in the records of the Foreign Office (including telegram intercepts revealing the Chinese negotiating strategy), a heroic and multi-lingual scholar could probably put together a fascinating narrative by adding Tibetan, Chinese, and Russian sources to the mix.
The key topic of the tripartite negotiations between Great Britain, Tibet, and China was the definition of a border between China and Tibet (relatively trivial, since it was understood that Tibetan regions adjacent to China would be administered by China anyway), and the drawing of a second, crucial interior border creating Inner and Outer Tibet.
The British intention was to establish "Outer Tibet"--controlled by a weak and friendly state under the Dalai Lama that had made its foreign relations subject to a British veto--and not China, as the primary point of contact between British India and the northeast. The pricetag for China's surrender of its claims and opportunities in "Outer Tibet" would be obtaining undisputed sway over "Inner Tibet".
During the negotiations, there was a lot of scribbling of proposed boundaries between Chinese and Tibetan zones of control on the map. Unsurprisingly, the Chinese motto was "Go West" and its most extreme proposal placed the boundary between Inner and Outer Tibet 100 miles from Lhasa. The British, with Tibetan acquiescence, pushed back in the west but alienated Tibetan territory in the east and north with a free hand, as long as a direct "Inner Tibet" a.k.a. China border presence down by Assam (a.k.a. British India, "the precious") could be avoided.
Here's some competing border ideas (Lamb, pg. 485)...
... and the final proposal (in which "Kokonor" a.k.a. today's Qinghai was signed off to China as well as a vast tract north of the Kunlun Mountains). This is the arrangement the Chinese representative initialed but the Chinese government repudiated and refused to ratify. [Lamb, pg. 518]
The Simla Convention foundered on the inability of China and Great Britain to come to terms over the boundary between "Inner" and "Outer" Tibet. The boundary between "Outer" Tibet and British India was not a topic of the tripartite negotiations, understandably since the very purpose of the Simla Convention was to ensure that Tibet, and not China would be British India's designated interlocutor in the northeast.
Negotiations on the boundary that came to be known as the McMahon Line were a bilateral British-Tibetan show. In fact, maybe only a British India-Tibetan show.
An interesting lacunae in the historical records covered by Lamb concerns the details of the negotiations between the British Indian and Tibetan representatives about placement of the McMahon Line. According to Lamb (pg. 546), the contents of these negotiations were not even minuted to the Foreign Office in London, another indication that something considerably less than a negotiation between sovereign states was going on. It would be interesting if these records could be made to appear.
It is known that the key area of concern in delineating the border between British India and "suzerain' Tibet was the "Tawang Tract", a thumb of land at the western terminus of the proposed "McMahon Line" next to Bhutan. Here's a nice map Andy Proehl drew for China Matters a few years back to give the lay of the land.
Lamb makes the noteworthy observation that Tawang was in several respects a poisoned chalice for the British and Indian governments.
However, Tawang was indisputably part of Tibet, culturally, religiously, and politically. The town of Tawang was (and still is) the site of a large and important monastery affiliated with the Drepung Monastery in Lhasa that administered territorial holdings in Tawang through its monks. Second, the northern part of Tawang was also incorporated into the administrative structure of the Tibetan government.
Surrendering Tawang was a major concession by the Tibetan government to Great Britain, one that could only be justified if the Simla Convention secured either peace and a mutually recognized border with China, or significant and effective military and diplomatic assistance from Great Britain to Tibet as the dispute with China ground on. Neither of these materialized and the Tibetan government subsequently declared the McMahon Line was a dead letter and continued to tax and administer Tawang.
Problematically, inclusion of the Tawang Tract below the McMahon Line also made a mockery of subsequent claims that the Line in any way reflected a natural ethnic or geographic boundary between India and Tibet.
The fact that McMahon moved the line north during the negotiations with the Tibetan delegation (it was first considered adequate to control the Se La Pass, the limit of Tibetan government administration, but then the line was moved north to encompass the monastery itself, presumably because the powerful monastery held authorities over communities south of the pass) is another indication of its less than organic character. [Lamb, pg. 535]
Unsurprisingly, Chen declared the Chinese government would not recognize any agreement concluded bilaterally between Great Britain and Tibet, a declaration that was repeated by the Chinese Minister in London.