The European leaders are in all kinds of bind here, they aren't dumb - they understand the threat, but they are also constrained by the circumstances and, among many other things, the natural desire to kick the can further down the road, until it's not their problem anymore.
This kind of thinking can lead to all kinds of sad outcomes, especially when this thinking is based on Western rationale that does not match the Russian one.
It's like me, before this war - I also was like "no way Russia launches a full-scale invasion and war", and yet here we are. So now you have this similar thinking here "no way Russia attacks Baltic states". This kind of thinking needs to go, or else one morning people may wake up to war they are not prepared for.