So there are two basic possibilities as I see it.
First lets throw out the obvious BS. No, these are not just normal innocent military exercises. Russia controls a lot of territory that it could use for exercises. To conduct this scale of exercises where they are would be the height of incompetence and irresponsibility if it was just by coincidence. The odds of some accidental event getting a shooting war started by misunderstanding would be very high. It'd be like our military conducting live fire exercises in a parking lot in downtown Las Vegas.
This is either a planned invasion that they may or may not go through with now that they were spotted early and are under a microscope, or this was an intimidation attempt to display their military might to squeeze concessions out of NATO and Ukraine. In either case they are going to claim it's just exercises as long as possible.
If it's the former, I don't see how Putin calls it off at this point. Like the Guns of August, time-tables and logistics have a life of their own. I think the momentum towards war is hard to pull back from now.
If it's the latter case, I think it is a fundamental mis-calculation on Putin's part. If he pulls back now, it is not going to be seen as a close call and gosh it's scary what Putin could have done if he was really pissed off.
It's going to be seen as the West having stared Putin down and backed him down. It will embolden and strengthen NATO and Ukraine's confidence and willingness to stand up to Putin in the future. After all, if they backed him down once.... The loss of face would be catastrophic for an authoritarian whos authority rests on his illusion of invincibility. He almost has to go in now to preserve his power, regardless of the cost, and hope for a quick victory and China coming through with enough trade and economic support to deflect the inevitable sanctions.
Putin may have painted himself into a corner. No one will believe it had all been exercises after all. If he doesn't invade at this point, it is a clear defeat and loss of face. A death sentence for an authoritarian.
