Entering the war is operating under poor intel. And most did not expect Ukraine to resist this effectively. Even now, there is a large majority of people who think Russia will eventually be able to negotiate a favourable peace.

Whether something being a sunk cost fallacy isn’t rely on the existence of sunk cost, but that the continued endeavour is unjustified. And thus you must measure the outcome between stopping the war now versus continue carrying the war. And you must measure it in regard to their relevant strategical goals.

There are internal consequences of “backing off”. You also cannot just “back off”. You need to find a peace settlement that both sides would accept. And there simply isn’t one at the time, or even now. Within the first few months, Russia still had a lot of war potential to mobilise whereas Ukraine, in the short term, has limited capacity in production as well as receiving only limited aids. Military platforms and ammunitions need to be produced and delivered over a long period of time. Even now, the Russian still has a size and artillery advantage.

You can say the russian militaries are being humiliated, but it’s the Ukrainian troops that have to deal with immense pressure and infiltration tactics that without adequate infantrymen, while extracting the wounded remains difficult.

The short to medium terms macros favours Russia. The long term macros depends on how determined Europe is in arming Ukraine. A defeated Ukraine will allow Russia to lock down the plains, connect to transnistria, control the Black Sea resources, control Ukrainian grains, and increase their populations by the hundreds of thousands or millions from the occupied territories. It will solidify political control and have another corridor to destabilise the balkans and Europe.

It can be argued that their maximalist peace offering, at this point, is stupidly optimistic. But the fact remains that Russia still holds the initiative, and can rationally justified then continuation of the war, if not now, at least for the past years up to now.