How a customer could choose "A330-Neo" or "A350 Regional" on shorter routes?
This probably just boils down to the economics of the route. An aircraft for a route is chosen based on more factors than just fuel efficiency. Airlines have to weigh in other factors like:


Number of landing/take-off slots available at the airport


This is because an airport can only support so much traffic. It may be more economic to fly a larger aircraft with more seats than multiple flights.

Cost of gates/landing fees, etc


Airports make money by charging per-passenger and per-aircraft fees. If an aircraft is parked at a gate, it is costing the operator to be there, so the more aircraft the more expensive it gets. Airports may charge depending on the size of the aircraft as well.

If the airport is equipped to handle an aircraft of that size. Some regional airports can't handle larger aircraft (either from a gate/facility perspective or a runway/taxiway surface one).
How many passengers need to travel that route on a daily/weekly basis
Regional fuel costs
Training/currency requirements for pilots and how easy it is to move between them


If going from the A320 to the A330 is a simple course vs the A350 being a whole new endorsement, they may choose the A330 to be able to have higher utilization of the existing pilots vs having specialized crew.

Same as above except substitute mechanics, spare parts, etc. This is a major reason that Southwest only fly's 737's, short or long-haul.
Ability for the aircraft to service other routes.


All said and done they need to pick the aircraft that is the most economic for the intended mission and fits into the business model of the company more. Airbus isn't going to take a customer that wants the A330 and push them into an A350, it isn't like buying a car where the salesman upsells you, the customer by the time they approach Airbus for a purchase contract already knows exactly what they need. Think of it more like buying tools (where you need exactly the right tool for the job) than it is about buying a car (the Corvette is nice, but have you looked at the Prius?)...