Not confused at all, and respectfully disagree. Unless Putin is delusional (which I think he is not), he realizes that Russia's prestige is only based on untapped hydrocarbon and a stack of ICBMs. He has to realize that he does not have the infrastructure to be "the" dominant world power anytime soon. China is the real threat in that department.
On the other hand, if Putin can hand his populous a few imperial crumbs ........ his popularity remains in place, and he stays in power in perpetuity.
If Putin shared your assumptions, he would have moved his entire military to the Chinese border instead of smacking around former Russian possessions that pose no threat to him. Never assume that your opposite number thinks the way you do.