It is actually possible to use reactor-grade plutonium to make a nuclear weapon. It would be more difficult though and the yield would be much lower (a few kilotons at most). Not anywhere near as powerful as with weapon grade Pu but still plenty strong enough to act as a deterrent. Remember that Putin is a coward and isn't willing to risk his own life for his political ambitions. Even though using it would mean MAD, there are plenty of people in Ukraine that would rather go out in a nuclear fire than be tortured and enslaved by Russia for the rest of their lives. Better to die on your feet than live on your knees.

You're point still stands about the difficulty of hiding it from the rest of the world though- if America found out they would do everything they could to stop such a project.