I don't doubt that Kenobi sensed Vader as they approached. Vader had no need to hide his presence at all; as far as he knew, there were no Jedi to hide from. As for Kenobi, most likely he was masking his presence at that point, not because he expected to run into Vader of the Emperor, but simply out of habit. He had been doing so for many, many years at this point. So now that he is aware of Vader, what does he do? From this point, everything hinges on the fact that Vader and Kenobi know each other VERY well, enough so that each can generally predict the others actions.
Once Kenobi feels Vader's presence he knows he needs to confront him, for personal and practical reasons. After the events on Mustafar, he bears the weight of his choice not to finish Vader off, and is still conflicted about it. Then on top of this, he has just felt the enormous disturbance in the Force caused by the destruction of Alderaan. Once he sees the Death Star and senses Vader's presence, he puts things together and realizes that his old apprentice has just snuffed out billions of lives somehow. With the weight of all those lives bearing down on him, he can't just run away and hide again. He must face Vader one last time.
He reasons that the tractor beam must be disabled to allow the Falcon to escape, and that a solo mission has the best likelihood of success. He knows that once he reveals himself, Vader will want to deal with him himself. Obi-wan is the last tie to Vader's previous life, and Vader will want to extinguish that tie personally.
He also reasons that his own presence will distract Vader from noting the new ripple in the Force that is Luke. If Vader were to realize that another Force-capable person was around, much less his own son, there would be no escape. Luke's best chance lay in Vader's attention being drawn elsewhere.
Knowing all this, Obi-wan stops hiding himself and allows Vader to sense his presence. It's not unreasonable to assume that once he does so, both parties are not only aware of each other, but aware of each others awareness (I know you know that I know!). It is unlikely that he has any illusions of the outcome of such a fight, but defeating Vader was never the point.
From Vader's side, once he recognized Obi-wan's presence, the process would have been simpler. As a Sith, revenge was right up his alley. Here was the man who maimed him and left him to die, and the last remaining tie to his old life (to his knowledge). He would NEED to unleash his anger at Obi-wan, in a way that simply having the ship blown out of space would not satisfy.
He knew Obi-wan well enough to know that the confrontation was coming. He knew Kenobi was there, he knew that Kenobi was aware of him, and most of all, knew Kenobi's mind well enough to predict that he would attempt to rectify his mistake at Mustafar. It's possible he may have also realized that Obi-wan had revealed himself deliberately, after many years of hiding. To Vader's mind, Kenobi was coming to finish things, and in a way, he was. Vader was unaware that the primary goal was misdirection, though.
I don't think anything after deactivating the tractor beam was a specific plan; Obi-wan's aim was to keep Vader distracted long enough for Luke and the others to GTFO. The fact that their battle took place in a spot that just happened to draw the attention of every stormtrooper guarding the Falcon was just a bonus.
tldr: Vader and Kenobi both realized the upcoming confrontation was inevitable. Vader knew his old master well enough to know that he would not try to avoid it.
